this cruise ship on the caribbean. federal health officials say the virus causes stomach and digestive problems. >> now it's time for your brew on this question of the day responses. >> we asked what you did to ring in 2013. >> my wife and i attended a charity fund-raiser, american cancer society. >> james wrote in bed and sleeping by 10:00. a little boring but warm and sober. >> raider cat says i spent new year's eve working. thanks to everyone who responded. of course happy new year to everyone, to my family as well if they're up and watching. >> happy new year to you. to all of you at home. >> 2013. "fox and friends" starts now. >> good morning everybody. happy new year. today is tuesday, january

1, 2013. happy new year! i'm here for gretchen. came down to the wire but senators managed to cut a late-night deal to avoid falling off the fiscal cliff. >> shouldn't have taken us this long to come to an agreement and this shouldn't be the model for how we do things around here. >> the deal isn't done quite yet. the republican-controlled house next up -- why are you smiling at me? because you're happy it's a new year? >> there is a separate tax hike that goes into effect today. another trillion dollars thanks to obamacare in new taxes. what it means to you and your wallet coming up. >> while lawmakers worked through the night, the rest of america had a little more fun ringing in the new year. >> five, four, three, two, one! >> with that, just six hours later, "fox and friends" starts now.

party! >> that's the way things began in 2013. >> you're looking live, ladies and gentlemen, as the cleanup continues there in the crossroads of the world. screen right, you can see the toys 'r' us. then you see a lot of police activity and garbage guys picking up tons and tons of confetti. >> i had the privilege of getting in here early and being the only one on the road along with two or three other cabs. we pulled through the tunnel, it was incredible. the same faces i saw at midnight surrounding megyn kelly were the same ones saying when does the more

fun start. >> don't you get a little nervous wondering are these cops looking at me? >> i'm actually cocky about it. i'm thinking this is the time you want to be pulled over. i've got nothing in me. >> especially when we come in to work in the 3:00 hour, you've got to figure everybody on the road aside from us may have had one or two egg nogs. >> we'll tell you what happened around the world on the new year's eve celebrations. in washington, they didn't ever turn out the lights. >> a bit of a hangover. this is a fox news alert. late last night, early this morning the u.s. senate approved their fiscal cliff bill. the final tote: 89-8. because the house of representatives has not yet voted on it, ladies and gentlemen, we have technically gone off the cliff. >> right. we do have a framework that the house will be voting on tomorrow, we believe.

we can give you some details on that. it is essentially if you want to know, in terms of a ratio 16 billion in tax cuts. >> a 41-1 ratio. >> that ratio is going to give a lot of republicans heartburn and a lot of americans heartburn. >> when you look at history, when ronald reagan agreed to increase taxes, he got $3 worth of tax cuts for every $1 in tax hikes. the tax cuts never came. however -- and this is the ratio right now. as juliet mentioned. 4 # 2-1. $42 in new tax hikes to every dollar in spending cuts. a lot of conservatives do not like that. that is not a good deal to them. >> the house has not voted yet. this is going to be in their hands at this point. john boehner is like we've got to look at things. it's not going to happen

overnight. >> it seems like a couple of weeks ago but it was about a week ago when the house of representatives voted on boehner's plan b which would have set the threshold at $1 million. now they're going to vote on it at $450,000. you've got to figure a lot of republicans aren't going to go along. >> what exactly happened? we're going to go over this in detail with chad who saw the play-by-play and was e-mailing us the play-by-play. mitch mcconnell called up -- bypassed senator reid who never got back to him on saturday and said can i speak to the vice president, joe biden? we're used to cutting deals together. like it or not, these are the two that hammered it out. they put it together. when it was all said and done, this is what joe biden had to say about how this deal actually came to fruition. >> what was said there was kind of hard to hear. what was your selling point? biden said: me. it's interesting, the

senators, the democrats all got together late yesterday, and joe biden went in, and his pitch to the liberals, particularly liberal liberals was -- quote -- "this is joe biden, and i'm your buddy." he was saying this is the best deal you're going to get. you guys got to go for it, and a majority of the democrats did. >> the little smirks and all that, but the fact is he went in there superseding harry reid who wasn't getting anything done. at least something happened. people wanted to see some sort of action. they wanted to know their congressmen who went home for the break would actually do something. >> here's mitch mcconnell on how this thing went together. he doesn't like the way it happened either but it's still done. >> shouldn't have taken us this long to come to an agreement, and this shouldn't be the model for how we do things around here. i know i can speak for my entire conference when i say we don't think taxes should be going up on anyone, but we all knew

that if we did nothing, they would be going up on everyone today. each of us could spend the rest of the week discussing what a perfect solution would have looked like. but the end result would have been the largest tax increase in american history. so it took an imperfect solution to prevent our constituents from a very real financial pain. >> as we mentioned at the outset, the final vote in the senate -- remember, it still has to go to the house -- in the senate was 89-8. those who voted against include democrats tom harkin, a democrat from iowa. tom carper, democrat from delaware. mike lee, the republican from utah. rand paul, republican from kentucky. richard shelby, republican from alabama. michael pw*epb net, democrat from colorado. charles grassley, republican from iowa. and marco rubio, republican from florida. rubio said he couldn't vote for it because two weeks -- years ago he ran on the

idea i wanted to be a part of solving the long term problems the country faces. and last night's vote did not do it. >> because of the spending issues. >> exactly. >> what we haven't done is outline what was in the deal that passed last night at about 2 a.m. in the morning. >> would you do that. >> first off, in terms of the threshold of taxes going up on those horrible successful people who make over $250,000, they can make it up to $400,000 for individuals, $450,000 for couples. it is an increase for republicans but it is a tax on people who are successful and supposed to be the types of people who would hire others. the rate for them goes up from 35% to 39.6%. call it 40%. when you look at dividends and when you look at capital gains, it goes up for those people who make over the same amount, although $250,000 is going to lose tax deductions. for those who make over

$400,000, if you're making dividends, if you're one of those horrible people able to gather dividend checks, you now are not going to bay 15% tax -- pay 15% tax. you're going to pay a 20% tax. >> in the new york city area they were concerned about where's the help for sandy. sandy relief was not included in this at this point. there is a possibility it can be tagged on in the house later. one other important thing to keep in mind is the sequester. the president wanted to kick the can down the street for a year, but at the end what they decided was that they would put it off for two months. that is going to be a looming debate they're going to have in two months. also the debt ceiling, technically we ran out of money at midnight but treasury secretary tim geithner figured a way to fin nay -- finnagle the finances where we can run

the government through the end of february or early march on the money they've got. debt ceiling or sequester, two more fights if the republicans want to have. >> inheritance tax goes up for people who have over $5 million. the doctors fix will continue for another year. doctors will be taking medicare patients for at least 365 more days. unemployment insurance remains at a year. >> one thing we need to make sure you understand about all these things we're talking about, these are things that the senate agreed to. the house is going to look at it, and they're going to chew on it, and if they don't like some of it, they're going to amend it and send it back. >> we're talking about, like no spending cuts. >> very few. >> let's hear what mitch mcconnell has to say about this. lots more work to do. we've got to get serious. >> now is time to get serious about reducing washington's out-of-control spending. that's the debate the american people want.

it's the debate we'll have next. and it's the debate the republicans are ready for. >> okay. >> is the president ready for it? he says everyone didn't get what they wanted, but what i'm always going to remember about this fiscal cliff is the president's pep rally in the middle of the afternoon yesterday, absolutely surreal. the only thing was mitt romney in a debate setting. >> we'll hear from charles krauthammer about that. let's do other headlines, shall we? >> okay. >> countries around the world are ringing in the new year. vatican city holding a special mass to celebrate watch. [singing] >> pope benedict the 16th leading the mass with prayer and singing. the holy ceremony kicked offer at saint peter's basilica in vatican city. a million people packed times square in new york city to ring in the new

year. 2,000 pounds of confetti littered times square. the famous water ford crystal ball dropped. in houston, texas, rain did not stop people from heading downtown for performances and fireworks. in baltimore, fireworks lit up inner harbor to welcome 2013. i know you guys were wondering what hugh hefner was doing for the new year. he got himself married to 26-year-old crystal harris. how sweet. where else but the playboy mansion when the clock struck midnight. this comes a year and a half after the couple was supposed to get hitched, but right before the wedding she broke it off. about a month later those silly kids got back together. we wish them well. >> if anything changes in the relationship, we will break into the program. the senate cut a deal to solve the fiscal cliff but

what are the chances of passing the house? that analysis is next. >> there is a completely separate tax hike that goes into effect today. another $1 trillion thanks to obamacare. what it means for your health and wallet. "fox and friends" live from new york city 2013. >> and washington, d.c. ♪ i gave birth to my daughter on may 18th, five days later, i had a massive heart attack. bayer aspirin was the first thing the emts gave me. now, i'm on a bayer aspirin regimen. [ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. [ woman ] learn from my story. marie callender's turkey breast with stuffing is a great reason to slow down.

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comfort individualized. save 50% on the final closeout of our silver plus special financing through new year's day. >> with the u.s. senate last night in washington passing a solution to the so-called fiscal cliff, it all comes down to what happens next in the house of representatives. president obama issuing a statement this morning saying, juliet? >> while neither democrats nor republicans got

everyone they wanted, this agreement is the right thing to do with our country and the house should pass it without delay. is the house likely going to pass it without delay, or pass it period? the chief congressional correspondent for the "washington examiner" joins us now. good morning, my dear. thank you very much for waking up early today. we especially appreciate it today. let's get right to it. what do you think is going to happen with the house? >> they'll gavel in today and they'll discuss the deal. and i think what it will boil down to is a deal that attracts a lot of democrats and some republicans. they need at least two dozen republicans, maybe more, depending on whether they lose a few democrats who don't like that higher tax threshold passed last night in the senate. it's going to be a matter of whether or not these republicans find enough attractive elements in this deal. and they might. they might like the higher tax threshold of $400,000 for singles and $450,000 for couples, the extension

of a tax break for those caught in the a.m.t. there's the removal of the medicare reduction payment for doctors known as the doc fix, extended for the next year. there is the estate tax that's been established permanently for folks who -- protecting estates under $5 million. there's a bunch of things in there that might attract republicans. the most important element, i think, if it passes the house that will attract republicans is the fact that this deal does not do anything about the debt limit. remember, obama really wanted to include a debt ceiling increase at least for a year. that's not in there. so that's a big loss for the president, that nobody's really talking about. what that means is the republicans have another bite at the apple here. the debt ceiling has been reached according to the treasury secretary. what that means is they probably got several more weeks to shuffle around federal money to keep the government operating, but that gives republicans another opportunity to try to force big spending cuts. as a sequester, it's been

put off for two months, but in two months they have to come up with another way to make cuts. the president says it won't be all spending cuts but it will be some spending cuts. that gives democrats the chance to do the kind of spending reductions they have been talking about for two years. >> what the republicans in the u.s. house are going to vote on is whether or not to increase taxes on individuals at $400,000 or couples at $450,000. the house rejected it when it was at $1 million with plan b. if the republicans didn't vote for $1 million, why would they settle for $450,000? >> they won't. what's going to be different this time is it will be a bill that passes with mostly democratic support. last time no democrats vote ford this $1 million deal that boehner put through. he couldn't get a majority of his own conference to vote for t. now we're going to require, there's 192

democrats in the house. they will all have to support this bill or most of them. they'll have to get 26-odd republicans to vote for it. we're looking at the more moderate republicans who will back this bill. having talked to those republicans, a lot of them are wary about this deal because it doesn't include the big spending cuts they were seeking to sort of justify this tax rate increase. it will be a bit of a cliffhanger going forward to see whether they do it today, whether they wait for the new congress on january 3 and whether they can pass this thing at all. i'm leaning toward they'll probably pass it because it's got those attractive elements and lacks the debt ceiling increase. nothing is for certain at this moment. >> susan, thanks very much once again for joining us today. we'll keep you updated on what's happening here. >> in the meantime, washington worked hard into the night, but why did it have to come down to the wire? >> because it's so exciting, providing

entertainment for us on new year's eve. lights out. the government pulls the plug on a popular light bulb. the alternative will cost you more. ♪

>> 22 past the hour. quick headlines. lights out for 57-watt incandescent light bulbs. the bulbs can no longer be sold but stores can clear out inventories. the bulbs are being phased

out for more energy-efficient ones. a new law in australia is banning ladies' nights. is it's part of an effort to tackle binge drinking but some bars found a little hole that says if the deal applies to everyone it's okay. so they might be offering drinks to men. >> despite the last-minute deal settled in the u.s. senate last night, the united states has technically fallen off the fiscal cliff as of now. the house has not voted and the president has not signed anything. why couldn't washington have solved this problem earlier? they have had it for over a year. did it have to be pushed to the very last second? i'm joined by debby dingle and ron myer. does it have to be done like this? >> i think all of us would like to see it not done like this, but i think the reality of what the tax increase would be to 100% of americans, i still think we're going to hear a lost static on the house side

before you see that vote. it takes coming down to the wire, unfortunately, too much in washington to get the answer to occur. we're only punting. it's going to make march madness a new definition. >> the sequester has only been postponed for two months. does this process bother you, the fact that we got here and so far congressional approval is now down to something like 5%. wherever you go, people are upset and embarrassed by this. >> i think that the house should be pretty embarrassed for how they've negotiated. president obama came out and said he wanted to balance -- the ratio is 41-1 tax hikes to spending cuts. if you think about it, it raises spending because it delays the sequester. we're raising spending and raising taxes. that is a deal senate republicans felt comfortable with, but talking with members of the house, they do not have the majority of the g.o.p. caucus. the g.o.p. is losing more

like 150 votes, at least over 100 conservative votes in the house of representatives if they try to run with this bill. >> if john boehner wants to be speaker again, he's going to come up for a vote in a couple of weeks. if he gets this passed with a majority of democratic support, he might be no longer speaker. >> absolutely. i think it's one of these things where it depends how hard he whips republicans into it. i think it's one of those cases where republicans in the house are very frustrated and are on the verge of doing that. we've been opting for a new speaker, somebody who can relate better to young people. we'd like to see him replaced. a 41-1 ratio is unacceptable. we have a huge debt crisis and we're not doing anything else about it. >> something else about this process i find fascinating from the sidelines is this was done by mitch mcconnell and vice president joe biden who used to be senator joe biden. there was no harry reid.

can you talk to me about this? >> the way things get done in washington is relationships. that's what we all need to do more of, democrats and republicans talking to each other. those two trusted each other. i think he had a good backup thing going on between senator reid and joe biden. mitch mcconnell trusted joe biden. they trust. in washington, your word is something that's very important. they got a deal last night. for the country, i think that was a good thing. >> we do know the republicans say it's not a raise on taxes for those who make $250,000. at least it's up to $400,000. they can say the bush tax cuts which everyone knew were going to be sunsetted in ten years, 12 years later 90% of them are in place permanently. are republicans spinning it and saying those are good things? >> i think they are legitimately good things. the fact of the matter is raising taxes on people

that hire folks my age and buying products that create jobs is going to do something for our economy. republicans say why didn't we have a plan earlier that defended those people, defended jobs for young americans, keeping the economy going. this does nothing for the debt, does nothing for spending. we're going to have another cliff in march but we have a greater cliff for our generation. there is a great piece in "the washington times" yesterday outlining that young americans are going to be falling off a cliff either way. we have to do something about it and it has to be soon. otherwise interest payments will be consuming our income when i get to be barack obama's age. >> the most frustrating thing is this does not address the problem. if any democrat or republican tells you this would legitimately address a budget that annually is $1 trillion over spending when they're talking about saving less than $1 trillion over ten years is not telling you the truth.

thanks so much. next, secretary of state hillary clinton has a blood clot near her brain. an update on her health when we come back. we've heard of bring your own beverage, but bring your own pot? that's what's happening in one state. [ male announcer ] coughequence™ #8. waking the baby. [ coughs ] [ baby crying ] ♪ [ male announcer ] robitussin® liquid formula soothes your throat on contact and the active ingredient robitussin®. don't suffer the coughequences™. your soups are so awesomely delicious my husband and i can't stop eating 'em! what's...that... on your head? can curlers! tomato basil, potato with bacon... we've got a lot of empty cans. [ male announcer ] progresso. you gotta taste this soup.

>> the first "fox and friends" for 2013, your new year's edition. check out the fireworks display in rio. two million people gathered to see the show, many not wearing much clothes. >> most wearing speedos according to to a recent study by the pew people. over to dubai where one million people packed downtown for this 35-minute light show. thousands of tourists flew in to the country just to see it in person. that's cool the way they do that. in london, big ben chimed at midnight and fireworks lit up the sky over the london eye. people started to line the thames river yesterday afternoon. >> what happened to

shanghai? >> not only did they have fireworks, they had a laser show as well. weren't fireworks invented in china? any way, they know how to do them. >> thank you very much. we're up for a special edition of "fox and friends" because of what happened in the senate last night. we're going to keep you updated. we've got doug mcelway, he's going to give you an update on what happened in about a minute. >> i was at disney for the practice for the new year's day celebration on, was it new year's eve or the day before new year's eve, the 30th -- it's hard to remember what day it is. that was the most incredible thing. at one point i thought we were being attacked. i believe i was at one of the parks. magic kingdom. >> two days ago, you don't know where you were? >> one day leads to the

next. >> if it's tuesday, this is "fox and friends." brian, you're fired. >> i did miss monday. the good news is the senate approved a fiscal cliff deal. the bad news is your taxes are going up regardless thanks to obamacare. and if you're over one of those horrible people who make over $400,000. five new taxes under obama care will start going into effect. affecting everything from health care costs to the cost of medical devices. the congressional budget office says there is a $1 trillion tax hike over the next decade. we're going to talk to one of the guys with medical devices and how they're going to be affected later. >> overnight two people gunned down in the middle of new year's celebrations. it happened in sacramento, california. people say a fight broke out in a restaurant and it spilled out into the street. three other people were injured. police haven't said if they arrested a shooter or not. >> the daughter of a prominent new york city doctor, and he's an occupy

wall street organizer, both under arrest for having explosives and a document called a terrorist encyclopedia in their upscale manhattan apartment. 27-year-old morgan glideman is also pregnant and went into labor after being arrested. her boyfriend, aaron green, is in jail without bail. cops say they were tipped off by another couple who just met them and saw the items in their home. >> that's a whole freaky situation there. >> that's not normal. >> secretary of state heubgt -- hillary clinton spending another night in the hospital. a blood clot in her brain discovered during a follow-up exam for a concussion. doctors are treating her with blood thinners and say she's making excellent progress. she is expected to make a

full recovery. >> byop. colorado opened its first recreational pot club. it's been just a month since pot was legalized this. -- somebody is having a really hard time with this. as soon as the private club was created, hundreds of people signed up. colorado's pot law prohibits public smoking. club goers pay $30. no pot is provided inside. you have to bring your own byop. >> in other words, it's potluck. in 2013 that phrase is going to make a come-back. >> let's talk a little bit of sports. a lot to go over. it looks like everybody got fired in the nfl and then they decided to leave a few guys there who didn't make the playoffs. nfl coach or g.m. is getting let go. i'm talking about seven

coaches and five general managers were fired after the last day of the 2012 season. among the casualities, the chargers coach, chief's coach and bears coach despite tens wins. bills, browns and cardinals also let go of their coaches. some teams wasted no time looking for new men. foxsports.com learned the bears and eagles are looking at mike mccoy. cardinals are reaching out to andy reid. and the chiefs and eagles and browns are interested in falcons offense coordinator. it was a battle of the tigers and the chick-fil-a bowl. the clemson tigers would score this touchdown with 12 -- from 12 yards out. they would go ton win. they trail by just 2. let's move on to something

with action. do i have to do a re-creation or do we have that video? we have the video. there we go. i believe the field goal was good. there we go. clem done got that ball -- clemson got the ball, win the 11th game of the season. the final score was 25-24. that is what's happening in the world of sports. back to you people. >> continuing kofrpbl of that fox news -- continuing coverage of the senate passing a deal to avoid the fiscal cliff. >> the deal is far from done. doug mcelway who has not been to bed in about three days is joining us live from the bureau with the very latest. >> not that bad. it was at 10:30 they called me in. i've had no sleep tonight but i'm doing okay. i got to see my wife this morning. you interviewed susan. she was here. >> that's your wife? >> that's your wife.

>> i was wondering why she came in on a big holiday. >> we did our new year's eve kiss a little bit late but it was nice to see her. final vote in the senate last night, 89 yeas, 8 nays. it passed overwhelmingly in the senate even though senate leader of both parties admitted it was a very imperfect bill. listen up. >> working through the night and throughout the day we've reached an agreement with senator mcconnell to avert tax increases on middle-class americans. i've said all along our most important priority was to protect middle-class families. this legislation does that. >> this shouldn't be the model for how we do things around here, but i think we can say we've done some good for the country. we've done some good for the country. we've taken care of the revenue side of this debate. >> that's an important point from mitch mcconnell. we've taken care of the revenue side but how about

the spending cuts? there are very few of them in the bill. there are 620 billion in tax increases but only 15 billion in spending cuts. that's going to be unpalatable for a lot of republicans in the house who believe they were sent to washington with one mission: to cut spending. the bill raises tax rates on inces over $400,000 for individuals and $450,000 for couples. it blocks for two months spending cuts or sequestration to military and government programs. it extends unemployment benefits for the long-term jobless for another year. it prevents a 27% cut in fees for doctors who treat medicare patients, the so-called doc fix. it prevents a spike in milk prices. it raises the tax rate on estates valued over $5 million from 35% to 40%. at 2:38 this morning the president issued a statement which read in part -- quote -- "while neither democrats nor republicans got everything

they wanted, this agreement is the right thing to do for our country, and the house should pass it without delay." keep in mind speaker boehner doesn't even have to bring this bill to the floor if he wants. republicans have operated under the last several years under the so-called hastert rule where if they don't feel they have a majority of the majority, they generally don't bring bills to the floor. we're going to see if they make an exception for this fiscal cliff bill. as you've heard, some people already this morning, including my wife say there's enough goodies in this for republicans that it probably will pass with a lot of democratic support. you've got this hastert rule in effect, which may allow speaker boehner not to bring it to the floor at all. we shall see in the next couple of days. >> doug, i think you're the first washington correspondent we've had on this program who's quoted his wife. >> i learn everything from smart. >> we didn't realize your wife is susan ferrichio

with the examiner. i looked up on wikipedia. i see not only are you married to her, you have four children and you occasionally play the banjo, bluegrass music at a local tavern. is that true? that i that is true. i gave it up because this pays better. >> the first time wikipedia has been accurate since 1971. >> it's the start of a new year. what is 2013 going to hold when it comes to jobs, the economy, my love life. so important. everybody wants to know that. >> that's not on the prompter. >> sorry. it says love lives of the celebrities. our astrologer is here to reveal what the stars have in store for the new year. >> or we could just talk to doug's wife. >> is a sew -- say so long

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like acid reflux disease. over time, stomach acid can damage the lining of your esophagus. for many, prescription nexium not only provides 24-hour heartburn relief, but can also help heal acid-related erosions in the lining of your esophagus. there is risk of bone fracture and low magnesium levels. side effects may include headache, abdominal pain and diarrhea. call your doctor right away if you have persistent diarrhea. other serious stomach conditions may exist. don't take nexium if you take clopidogrel. let your doctor do her job. and you do yours. ask if nexium is right for you. if you can't afford your medication, astrazeneca may be able to help.

>> got quick headlines from the control room. talk about sea sick, a noro virus strikes again on a cruise ship in the caribbean. federal health officials say passengers on the queen mary 2 are suffering stomach and digestive problems. last week 200 people got sick from the noro virus on a separate ship. >> attention net flix users. congress passed a bill to share what you watch. users will have the opportunity to opt in or out of the social sharing

feature, which i think is a really good idea. >> thank you very much. with the new year comes new changes on jobs, the economy, your personal life. who doesn't want to know what the future holds? joining us with her cosmic calculations for 2013 is susan miller, the founder of astrologyzone.com. we want you guys to write in, e-mail your questions. what do you want them to write? >> if it's about themselves, i'd like to know their birthday. >> let's start off with the which i and jobs. what are your predictions? >> it's going to chug along. it's moving forward but it's going to take time and we need to be patient. i'm not surprised that they didn't come to a final answer because you need a new moon in a financial sign like cap peri --

capricorn coming january 11. >> how about politics. we know what happened with the election. but what else is going to be happening? >> first of all, boehner and mr. obama were not the right two to be negotiating because the scorpio and the lion exactly 90 degrees apart is a square. >> they shouldn't get married? >> i think it was good they brought in some other players. >> not a political marriage? >> because they communicate better, different people. i think that was good. mrs. clinton, a scorpio is at a low ebb with their help. i have been writing that. we're all going to say prayers for her. she's w hard. she can come through it and she's in the best hand. >> let's do genericically relationships. >> we've all been texting

too much. now neptune moved into pisces and we're going to want to see each other more. touchy feely. last time neptune was in pisces was 169 years ago. >> we're all going to be mushy and public displays of affection? >> we won't go extreme but it sounds like you don't like that because you're a libra. but seeing each other more is a good thing. >> texting does tend to -- i like it better than talking. >> texting is good but you don't want to be in a beautiful restaurant -- >> definitely. e-mail your questions about 2013 and susan will answer them all morning long. >> absolutely. >> put in your birthdays and dates. >> and time of birth and city of birth. >> you'll know everything. in a few hours the house could vote on the senate's fiscal cliff deal. will it pass? our next guest says republicans should have walked away.

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>> we're hours away from the house potentially voting on the senate's fiscal cliff proposal. our next guest says republicans got a raw deal so far and should have walked away from the one presented. >> the editor of real clear markets joins us from our nation's capital. good morning. in the middle of the night the senate passed this thing. it would raise the threshold on taxes to 450 for a married couple. >> up to almost 40%.

>> it now goes to the house where a lot of republicans are going wait a minute, we just got reelected a couple of weeks ago and we said we'd never raise taxes. you can't expect us to do that. what's it going to do? >> i think they should run from this as fast as they possibly can. this is such a bad deal for the republicans. one of the best things about their brand is they have been principled against tax increases. they realize we have a spending problem, not a revenue problem. to then turn around and agree to major tax increases -- and that's what we're talking about in return for nothing in the way of spending cuts -- would be the ultimate in bad deals. >> there is almost no spending cuts. the ratio is staggering. there is $620 billion in tax hikes to $15 billion in cuts. could they be set to fight another day? two months from now on the debt ceiling and say we'll take this deal because on the bush tax cuts, almost all of them stay intact permanently when they were

supposed to be sunsetted two years ago. >> the beauty of taking this into 2013 is president obama would have to do his state of the union and explain why he could not get a fiscal cliff deal. he would have to explain why he could not get a debt sealing deal. why republicans didn't use their leverage into 2013 is amazing and hopefulfully they will. i'm watching senator harry reid and mcconnell, they're you canning about how this will avoid tax increases on the poor and middle class. it's the exact opposite. there are no jobs and this are no companies without investment first. when you raise taxes on top earners, you by definition lower the earning potential of the poor and middle class. it's a terrible deal for all americans. >> one thing they have done now, john, is if the house passes this going forward then the democrats will not have that gigantic club of being taoeubl say republicans are sticking up for millionaires and

billionaires, people who make over $400,000. that would be removed from the equation and then you could get down to some spending and entitlement reforms, which is really what the republican party wants to do. >> does the republican party want to be the party that says to the most productive, the fred smith of fedex, the late steve jobs that if you achieve, if you try something great commercially that improves our lives and employs us, we're going to penalize you for doing it i don't think that should the message for the republican party. kweupbdz -- republicans are supposed to be about growth and enterprise. this is them saying the opposite. >> you've got people saying there was a lost growth during the clinton years and the top rate, was that 3 9%? >> i would say if you give

us all we had during the clinton years we would take 39% but you wouldn't take it when the dollar is in free fall. this is a very bad deal. it's antigrowth. the last thing you want to do in a struggling economy is raise the penalty on work for the most productive. >> what about the dividends going up from 15% to 20% from those who make that horrible rate of $400,000? >> it's another negative signal. when you raise the tax on dividends you reduce the process whereby limited capital can get to new businesses. this is another antigrowth provision. it's telling those who have got the money to invest in new ideas that we're going to penalize you for doing it. >> you must think it is delicious irony that the democrats who for so many years have demonized george bush's tax cuts, they are now permanent if this plan goes forward for 98% of americans. now they love it. >> isn't that interesting how the whole time they did

not want these tax cuts and now they say they're essential for the future of the economy. the republicans should not go for this. this is such a bad deal. this is a very quick run to the minority status if they go for this bill, i think. >> let's find out. they're going to get together this afternoon. will they bring it up? don't know yet. john looked at this bill at 3 in the morning. thanks so much. >> thank you. happy new year. >> have you had enough of the fiscal cliff? that phrase, one of the many that americans want banned in this new year. wait until you hear what else is on that list. >> chances are you watched the times square ball dropped. but down south it was all about the peach. we're going to show you all the bizarre and unusual new year's eve traditions next hour. i love that peach down in georgia.

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this means physical activity can help your kids in the most important game of all -- life. s. >> juliet: good morning, everybody. today is tuesday, january 1. it's 2013. happy new year, everybody. i'm juliet huddy in for gretchen. it was down to the requirement last night so many things happened, lawmakers missing the midnight deadline u about they did cut a fiscal cliff deal in the overnight hours. >> shouldn't have taken us this long to come to an agreement and this shouldn't be the model for how we do things around here. >> juliet: we'll break down the details. >> brian: i'm going to talk now. we're not out of the woods yet because the republican house still has to vote, so does it have a chance at passing? we'll find out in a few minutes. that's washington. >> steve: are you sick of kick the can down the road? that expression? we have a spoiler alert.

first you have to check some things off your bucket list. do you hate those expressions in you're not alone. what these phrases have in common with the fiscal cliff. they could all be going away. "fox & friends" hour two for the first tuesday of 2013 starts right now. ♪ >> juliet: have you guys been down there in times square? >> brian: yeah. >> juliet: you've seen this before, it's like a miracle. it's a miracle. >> brian: right. that's what new york is great at. having big party and cleaning it up so we can have another party. >> steve: i think that's the first time i heard she daisy. >> brian: right. in 2013, there's a lot of music

i haven't heard yet. >> steve: we just showed you the clean-up there in times square. maybe we'll show you how they dropped the ball. this is some of the actual confetti. >> brian: can you lift it up to see it dates back to yesterday? >> steve: it's all over the lobby. you can get your own. >> brian: okay fine. i'm a little skeptical. >> juliet: during one of the commercial breaks, they were playing a song and i did not think mr. square would know, but you did. >> brian: what was the song? pit bull. you now i have to tell you that the audio technician told me. i was close for an hour. >> steve: let's get to the fox news alert. just shy of that midnight deadline, the senate passed a deal to avoid that so-called fiscal cliff. now it heads to the house. we don't know how the house is going to vote. we don't even know if they're going to take it up today. >> brian: so far the indications are not too positive. here to break it down, wendell

goler has been scramble to do give us the first update for 2013? is that true? >> the deal they passed about 2:00 o'clock this morning makes the bush era tax cuts permanent for families making less than $450,000 a year. they're permanent because it passed by a more than two-thirds majority. that's wider than president bush was able to come up with in 1991 and '93. only five republicans and three democrats voted against the measure this morning. that could make it easier for house republicans to go along. but the deal doesn't contain any spending cuts. vice president biden who worked out the deal with senate minority mcconnell wouldn't predict how the house will go. >> it surely shouldn't predict how the house will go. i feel very good. happy new year, and i will see you all maybe tomorrow. >> the deal provides another year of extended unemployment benefits.

democrats had insisted on that since people are spending such a long time looking for new jobs. it raises the value of a state's protected from the death tax, permanently indexes the alternative minimum tax for inflation, but payroll taxes are going back up. spa in the mcconnell said it was a compromise and not a very pretty one. >> it has taken this long to come to an agreement and this shouldn't be the model for how we do things around here action but i appreciate the vice president's willingness to get this done for the country. i know i can speak for my entire conference when i say we don't think taxes should be going up on anyone. >> it's still not clear if the house will vote on the deal today or if it will pass given that house republicans believe so fervently the nation's problem is spending, not revenue. president obama released a statement this morning saying, quote, this agreement is the right thing to do for our country and the house should pass it without delay. he promises to do more to reduce

the deficit. that fight like low to begin within weeks as republicans demand spending cuts in exchange for raising the debt ceiling. juliet, brian, steve, happy new year. >> steve: thank you very much. i believe this could be the very first live shot from the white house. wendell, technically, because the house has not yet passed it, technically we've sailed off the cliff, right? >> we are off the cliff now. you feel you're in free fall? >> steve: a little bit. thank you, sir. >> juliet: thanks. congratulations on the first live shot. >> steve: indeed. >> brian: what is in this bill? as wendell just said, receipts go over a few things. taxes do go up for singles, individuals who make 400,000 and above. for couples who make 450,000 and above. dividend and capital gains taxes rise from 15% to 20%. if you happen to die, you are going to be given up 40% if your estate is worth more than

5 million instf 35%. unemployment benefit remain at one year instead of six months. >> steve: keep in mind, john boehner brought up his plan b a week or two ago and it was -- it set the limit at a million. that was voted down. so now there are a lot of conservatives who say, wait a minute. you're still at 450. they probably should have taken the million, but that ship has sailed. but a lot of conservatives are looking at the gigantic amount of tax increases compared to the number of cuts if you look at it, it raises new revenues and $15 billion in spending cuts, that is a ratio of 41 to 1. in other words, for every 1 dollar in spending cuts, they raised $41 in new tax hikes and that is not good for a lot of conservatives who say where is the sweet spot in there for us? susan, with the washington

examiner says ultimately she feels this could be a loss for president obama because included in this deal that has passed the senate there is nothing about the debt limit, which did he want. >> most important element, i think, that, if it passes the house that will attract republicans, is the fact that this deal does not do anything about the debt limit. remember, obama really wanted to include a debt ceiling increase, at least for a year. that's not in there. so that's a big loss for the president, but nobody is really talking about. >> juliet: so mcconnell says we have to get serious about spending. but one of the other things is this sequestration issue was a big issue. so there will be a couple more months for folks to figure out, for lawmakers to figure out what to do with that. >> steve: and kick that down the road. that can down the road. and technically, i believe we ran out of money at midnight, but they're rejiggering things at the treasury department so the debt ceiling, looks like they'll have that fight at the end of february or march.

those are two things that the republicans may say, i'm coming up short on this deal, they have much more leverage in upcoming spending cut talks. >> brian: we're going to have another cliff, another deadline. it will go to the brink. you can be sure. we'll find out who has the leverage. the huffington post leans way left says leverage lost. criticized the president and the democratic party for not using their leverage to get everything they wanted. ron myer who joined us earlier, part of a conservative group in washington says he's heard directly from senior gop members in the house that speaker boehner does not have a majority of support from the gop caucus, not even close. so does he put it up if he's promised democrats will join the republicans that support it and pass it? and risk not being speaker again? so there is going to a lot on the line or do the republicans and the house say, yeah, i'll pass this if you add this and this and do they have to

reconvene and i guess amend this? >> steve: exactly. remember, this was simply passed by the senate. we have bicameral form of government where it has to go to the house. if they don't like it -- >> brian: nancy pelosi is on record saying she supports it. so that means democrats would line up behind her. >> steve: while republicans are unhappy it's at 450,000, they don't want to raise taxes on anybody. there are a lot of democrats, liberal democrats, upset that it's not at 250. essentially mitch mcconnell wound up getting double what the president asked for. >> juliet: i was going to say, when you saw they worked through the night. when you saw the reaction after they cut this deal, vice president biden, who did go in and get something done, was really kind of saying, yeah, i'm taking credit for it. did he step in over harry reid, worked with mitch mcconnell,

made things happen. is this something to be cheering about and something to be gaffying about? i don't know. not a lot is happening. >> brian: i saw gallup said the president lost five points in popularity since this whole fiscal legal thing was trying to be hatched. i imagine they're going to drop more when they look at his ridiculous press conference yesterday afternoon when which had no benefit, i don't know who had any benefit from him mocking congress and how he's going to be here for four years whether you want him torino i didn't understand where that was coming from and who he was addressing. >> steve: it seemed like it was a really dumb thing to do. in fact, it seemed like it derailed the talks when he was there in the eisenhower executive office building and the one thing ha we haven't really touched on this morning that was contained in his comments is he wants more tax hikes next year. forget about what may be going through the house and becoming law with this fiscal cliff thing

today. he wants more tax hikes next year. >> juliet: america wants to hear about the spending cuts. let's get to some of the other stories makes news. lots of energy in times square last night as people rang in the new year. about a million people were in times square. they watched that famous waterford crystal ball drop as confetti and fireworks filled the air. moving over to vegas, lots of revellers along the strip in vegas as fireworks went off from eight different roof tops. live music throughout the city. >> steve: that's cool. >> juliet: seattle, fireworks lit up the space needle. over 60,000 people packed downtown there. take a look at this terrifying scene here. a helicopter trying to rescue a stranded -- >> steve: oh, my goodness. >> juliet: this happened atriy de janiero. all four people managed to make it out okay. the swimmer who was in distress

was saved by a nearby surfer. wow. it was a yearlong pain at the pump for americans that reached an all-time high. triple a says the national average for a gallon of gas in 2012 was 9 cents higher than the previous record of 3.60 in 2011. experts say bad weather and the tension in the middle east drove the prices up. 2012 is out and with it goes some of the most overused played out, annoying cliche phrases in the history of words. a list has been reloosed by lake superior state university of phrases from 2012 that should be banned from the english language. fiscal cliff, good luck on that. spoiler alert. bucket list, trending. and yolo, the acrow number meaning -- i never heard that. >> steve: my kids say that all the time. >> brian: what does it mean? >> steve: you only live once.

yolo. >> brian: really? ban ago phrase i never heard. >> steve: 12 minutes after the top of the hour on this tuesday. coming up, the fiscal cliff, i know we're -- we're supposed to stop using the word. not only the only word on americans' minds, today more. today we'll meet a guy who says he may have to lay off workers because of the obama taxes. >> brian: will lawmakers say more money in their paychecks? i heard this deal kills that raise 9d ad [ male announcer ] coughequence™ #8. waking the baby.

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>> steve: how ominous. today a new tax takes effect that you might not know about as part of the president's massive health care overhaul that passed a couple of years ago. it takes effect today. it is a 2.3% tax on the sale of all medical devices. >> juliet: we probably do know about it if you've been watching fox news channel because we've been following our next guest's story. while that might help raise $30 billion, there arrest lot of critics and peter cash could come at the expense of good paying american jobs. we're joined by andre, the president of adm electronics, a family owned medical device company in new jersey. you guys have 19 employees. for the first time you actually are thinking you may have to lay people off. tell us why you're in that position at this point. >> unfortunately, this is a totally discriminatory tax just on the medical device industry and it's a top line tax. it's on growth, regardless of whether or not you're making a profit, it's on the top line. therefore, it's an ill conceived

tax because this is an industry which is innovative, has a loft good paying jobs and i just can't think of a worst thing you can do to a manufacturing industry in this country. >> steve: absolutely. as we take a look at some gizmos right there, people think, oh, medical devices. that's probably what, a heart transplant device and artificial knees? no. we're talking what? >> it goes all the way from tongue depressors to mri machines or like what we produce, medical electronics that are used for diagnostic, as well as therapeutic purposes. so it's a whole array of products that are now going to be penalized with the only excise tax that's in this obama bill. >> steve: it hits the fan today. they kicked the can down to today and it hits the fan today. >> when you talk about happy new year. this is tax day for us in our industry. it hits the entire medical device industry for the biggest companies to smallest. the industry, over 2 million jobs are supported and 80% of those jobs are in companies with 50 employees or less.

so it's a small innovative industry. >> juliet: you have 19 employees and now they're working with you. they're not upset with you. but they're trying to work with you. what are some of the things they're doing to sacrifice? >> we're like family, it's a small company. for example, for christmas instead of taking christmas bonuses, we gave them the week off in between christmas and new year, just so that could help out financially. >> juliet: you haven't taken a paycheck in a while? >> you do what you have to do. we want to keep our people working and trying to find our ways. we're experts in medical device and trying to find other things. it's not just me. there are over 40,000 jobs being lost because of this new tax. >> steve: it's one of those things where with some taxes where you think okay. if i spend this, i would be taxed some and i'll put that off. with medical devices and medical necessity, it's not like you think maybe i should put that mri off, you have to have it right then. >> that's right. it would hurt the people in need the most.

when you talk about a tax increase, this is a tax increase on the people that need these services and also for our industry, this is just another thing that we have to deal with. we're already dealing with foreign competition, with much lower tax rates than other countries. so this is just another hurdle we have to get over. it's a very difficult situation. >> juliet: why does the president think this will create jobs? >> i heard that argument from president obama and he's just not being realistic. >> juliet: why? >> he thinks it's going to bring all these people in because all people are covered. the people who need medical devices are older and have medicare. it's not the young people coming in. most people don't wake up and say, you know with a? i'm going to go for an angioplasty. it just doesn't happen. >> steve: can you come back a year from today and we'll find out how it impacts you? >> be happy to. >> juliet: let me have some fun. thank you very much. >> steve: good luck to you. >> thank you. >> juliet: all righty. just a short time from now, the house could vote on the senate's fiscal cliff deal. i can't say that anymore?

>> steve: no. >> juliet: okay. who comes out the winner? we'll talk about that next. >> steve: plus say good-bye to gangam style. >> juliet: thank you! >> steve: the song that took world by storm. >> juliet: thank you. >> steve: it's heading into retirement. that dance -- >> juliet: go away. >> steve: my family tried last night with the invisible horse thing, good-bye, gangam. >> juliet: beat it. ♪ oh! progress-oh! -oh! -oh! you people are saying "progress-oh!" share your story for a chance to win a progress-oh! makeover in hollywood. go to facebook.com/progresso to enter.

>> juliet: welcome back. happy new year. yea. got your news by the number. new year's edition. 2688. that's how many of those sparkling waterford crystal triangles there are covering the times surveyor ball.

2,000. that's how many pounds of confetti rained down from the roof tops on the new york city party goes after the ball dropped. 60 million. that's how many glasses of sparkling wine have been poured this holiday season, likely when the clock struck midnight. brian, tothank you very much. i'll factor in steve as well. technically america went over the fiscal cliff a couple hours ago, but despite the near crisis, our next guest says the president could come out of this a winner. >> steve: good morning to you. >> good morning. >> steve: the senate has passed this. now it goes to the house. we don't know if they're going to take it up today or when. technically we have sailed off the fiscal cliff. the big question is, what's the house going to do? >> i think they're going to pass it. you have to remember the house could not pass plan b, which was john boehner's plan to raise taxes on people who make a million dollars. so how in the world would they pass something that's even less than half that, raise taxes on people before 50? you have to remember, all the

attention was paid to those republicans who blocked that planned deal. there is 240 republicans in the house. about 40 of them stopped it, which means there were 200 republicans who were ready to vote for plan b. some number of those are going to be ready to vote for this. if john boehner adds their votes to the democrats, i mean, the democrats have gotten the okay from president obama to vote for this, it passes the house. >> brian: here is the thing, does boehner risk not being speaker if he needs democratic votes to pass this and then he goes up for the speaker vote and people say, i'm not voting for you? >> you have to go back to the calculation republicans made from the very beginning in this, which is if there is no deal, taxes go up on everybody. and then in the first day of the session, meaning tomorrow or the next day, president obama then proposes to relower the tax rates for everybody under 250. then it becomes voting against

the obama tax cuts. that was the scenarios rinse were afraid of. >> steve: it looks like a republicans say it's a done deal, we'll have to raise taxes on the most successful. but we will live to fight another day. that day is when the debt ceiling comes up in a couple of months and the sequestration thing, they kicked it down -- two months! so the republicans think, okay. when we get down to the talk about spending, we're going to be big winners. >> they knew that raising taxes on the wealthy polled badly for them. that most americans were in favor of that. we're not on the winning side. they got that off the table and said, we'll win the debt fight. i say to them, well, won't the press just kill you for being the people who would drive the country to the very risk of default in favor of -- to save your spending cuts, which aren't popular in the first place. they feel they can win that fight. i'm a little skeptical. >> brian: in the big picture, if someone told that you there will

be a democratic president going on a second term and the bush tax cuts were supposed to evaporate two years ago would be in place, 98% would be in place, i don't think republicans would have thought that would be amazing if a democratic president would be there five years and make most permanent. >> i think george w. bush would think of himself as a winner in this in the sense the democrats opposed these tax cuts back when they were made. were bitterly against them for most of the time. now are in favor of most of them. part of the problem with the republicans is they had made their position, we will not raise taxes on anybody. and president obama has won that fight. >> steve: the president also wanted the threshold at 250. now if the senate plan goes through, it's at 450. so the republicans were able to win a little more wiggle room. >> that's the rincon solation prize. but the other big obama prize is no spending cuts. i mean, a few republicans are going to give in on this position you have held for decades, what are you going to get in return for?

remember that great "wall street journal" article where john boehner says, i'm putting all this revenue on the table. what am i going to get? barak obama says, you get nothing. i get it for free. that's what happened. >> brian: that's what happened so far. it's amazing because if the president actually wanted to balance the budget, he would be doing cuts. it doesn't seem like he's playing for the same goal as the average american, politics aside. >> we have one side that wants higher taxes and one side that wants lower spending. they're banging into each other. >> brian: thanks for coming in. >> thank you. >> steve: happy new year. >> brian: straight ahead, president obama wanted congress to get raises. but most americans think they're doing a very bad job. will lawmakers see more money in their paychecks? there is an update. >> steve: kind of a diplomay day in washington. chances are you watched the times square ball drop. down south it was all about the peach. we're going to show you how the rest of the country rang in the new year when "fox & friends" rolls on live from new york city

>> brian: more than a billion people -- okay, a million. gather to do watch a ball drop in times square. another part of the country,

people rang in the new year with some unusual traditions. atlanta, it was all about the peach. the 800-pound peach is juicy, has been a tradition since 1989. in orlando, more fruit. thousands of people gathered to drop the orange. >> juliet: why are you talking like that? >> brian: this year, not only rang in the new year, but marked the 500th anniversary of florida's discovery of the orange. >> juliet: yea, to florida. >> brian: we discovered florida. it was just sitting this wide open, all they had was disneyland and no people. >> steve: 500 years ago? >> brian: yep. magellan wrote all about it. >> steve: thank you for joining us today, a special "fox & friends" and a special promotion ceremony two minutes away. this will be great. you won't want to miss it. it will make your day. >> juliet: let's get to some other headlines. she's the daughter of a

prominent new york city doctor. he's an occupy wall street organizer. together they make a wonderful -- no, now they're both under arrest for having explosives in their apartment. 27-year-old morgan is pregnant. she went into labor after she was arrestedders forcing her arraignment to be delayed. her boyfriend p 1-year-old aaron green is being held without bail. cops were tipped off by another couple who saw the suspicion items in that couple's apartment. so kind of a strange story. we'll probably update you more on that. minnesota representative michelle bachman introducing legislation to block a planned pay raise for congress. president obama approved the raise last week burks bachman says given the current state of the economy and it doesn't seem like a good idea. in a statement she says, quote, we have a spending problem in our country. we should be looking for areas to cut spending. several other republican lawmakers are joining her effort to block the raise.

the senate's fiscal cliff deal puts the kabash on the pay raises, but has yet to pass the house. get ready to say good-bye to gangam style. ♪ the only reason i want to keep it around is because dave just did that dance. that was unbelievable. this dude, korean singer says he's retiring the song at the start of the new year so he can focus on his next big hit. lord help us all. steve? >> steve: let's switch gears. the new year is bringing if a new job for our next guest and an impresssive one to say the least. after nearly 25 years, of military service, he's about to receive the highest enlisted rank in the united states air force. senior master sergeant scott stoy joins us live. good morning to you. >> good morning. >> steve: what have you been doing in the air force all these years? >> for the first 12 years i

worked as a aero ground space and then recruiting. i've gone through the gauntlet of being a recruiter and a flight chief and moved up to squadron level and now the superintendent of active duty recruiting for the state of new york. >> steve: that's awesome. it's good because when you go into the recruiting office and you want to talk to somebody who has been there and doesn't -- it's good to have a guy like you right there behind the desk. >> yes. all of our recruiters have experience. we don't allow recruiters to come right in as a recruit. they have have experience in the air force to at least be a senior airman. >> steve: right now you are a senior sergeant -- senior staff sergeant. >> senior master sergeant. >> steve: officially at midnight, you became chief, right? >> yes, sir. >> steve: this is a greatonnor. this only happens to, what, 1%? >> 1% of the enlisted force.

>> steve: now today for the special day, shane, come on over here. i'd like to introduce you to the chief's son, shane, and right over here, lieutenant meghan stanton with the united states air force. it's all part of the promotion. >> yes, sir. >> steve: we will just be flies on the wall. we're going to watch and see how this goes. this is great that his son is able to take part as well. >> absolutely. >> steve: does it feel like the old one? >> a little heavier. [ cheers and applause ] >> steve: is that a tradition. >> it is. >> steve: by just your sons? >> whoever can do one.

sometimes the stripes aren't already on the jacket and they hold it threw and punch them. >> steve: fantastic. now you're a chief master sergeant. highest rank in the air force. thank you very much. that's a real honor to watch that today. shane, very nice. and lieutenant stanton. >> yes. >> we'll do the oath. >> steve: you're going to do the oath now. all right. >> raise your right hand, i, scott pat trick stoy, do solemnly swear to support and defend the constitution of the united states against all enemies, foreign and domestic, that i will bear true faith and allegiance to the same and i will obey the orders of the president of the united states, and the officers appointed over me, according to regulations and uniformed code of military

justice, so help me god. congratulations. >> thank you. [ applause ] >> steve: very nice. thank you for sharing that with us. that was terrific. >> thank you for having us. >> steve: happy new year. >> happy new year. >> steve: great way to start new year. >> yes, it is. >> steve: all right. juliet over to you and brian. >> juliet: you can join us over here. congratulations, guys. >> brian: as we've been talking about the fiscal cliff and the negotiations that went through the final hour, final minute, it was marshalled by senator mcconnell, as well as former senator joe biden. went back to his old roots and old connections and did something harry reid could not do and it's return a phone call from mitch mcconnell. after this was passed by the senate overwhelmingly, one of the people that did not vote for it was senator rand paul. he hated the fact that once again it's all about class warfare. listen. >> campaigned against rich people and you got enough envy whipped up in the country and you're going to stick it to

those rich people. the republican party, the party of limited government and low taxation should have no part in this. we should have no fingerprints on this and we should in no way support anything that raises taxes 'cause it's bad economic policy. >> steve: marco rubio, the senator from florida state, said he couldn't vote for it because he ran two years ago on a platform he wanted to be part of fixing the big problems in this country and what they did yesterday certainly did not do that. charles krauthammer was on the channel last night where he was talking a little bit about how extraordinarily the president of the united states, in the early afternoon, went in the executive office building, the eisenhower building next to the white house surrendered by middle class taxpayers. >> brian: supposedly. i don't even know that. >> steve: it was a real cheerleading event t. seemed like a campaign stop. he had already won. charles krauthammer says this is astonishing. watch this. >> i found it astonishing.

here he is coming out to speak to the nation at a crucial moment, in very delicate negotiations and he comes out there with incredible arrogance. he spikes the football on the republicans. he rubs in the fact that they were resisting a raise in rates and he made them do it. of course, there is always he places himself hovering, benignly at an olympian level above the fray where the children are playing in the sand box and he's asking that everybody be reasonable, as if he's just arrived in washington on a tourist visa. >> juliet: this went through the senate, but it still has to go through the house. who knows if that's going to happen? >> brian: i don't know. was it the part that the vice president was leading the negotiations that they bypassed the white house? senator mccain says here we are and you're trying to tell everyone how above it you are and that you won reelection. i'm going to be president for another four years. the tone, i don't know. i can't think of who would

benefit to book those people behind him, book those people to clap in front of him, talk about how he might have to spend new year's eve with some of them in the audience, and then he just leaves. and then they have to go back and we have to find out details of this plan that would pass a couple hours later. >> steve: bob corker accused the president of essentially heckling congress at that particular press event yesterday afternoon. charles krauthammer also said last night that when he was running for reelection, the president had to talk about i'm interested in making the significant spending cuts to get us on the right track. now that he's being reelected, where were the gigantic spending cuts in this deal with the senate? there aren't any. and will he have any going forward? charles krauthammer is skeptical. >> brian: here is the thing, if he wanted to balance the budget, anyone looking at the budget knows that you have to have spending cuts. it's not a democrat or republican issue. >> steve: harry reid has not brought autopsy budget for three years! >> brian: and the president continues to get a pass from the american people on this. by the way, the only reason the president got elected because he

said mitt romney would destroy the country and was a horrible person who i guess would do everything wrong. he talked about this, but he won because 85% of all his efforts were to denigrating mitt romney. that's how he won. >> juliet: charles krauthammer made a great point a few days ago. it was four or five days ago. he said right now the president has already won his second term. so he's not out there trying to be mr. popularity. he's doing things he wants to do for his legacy, whether or not this economy is yet to be seen. but will he be looking back and will we be looking back on this presidency as this whole development, what's happening with the fiscal cliff thing, will it be a positive part of his legacy or not? >> steve: the president during the campaign promised i'm going to raise taxes on millionaires and billionaires. of course, now it was 250. now it looks like it could be $450,000. but once that argument is taken away from the president, okay, you already did that. now what? then we're actually going to have to talk about spending. does the president really want to do something about spending

or is big government in the cards for him? it looks like big government in 2013. >> brian: i have a sense he's unfortunate going to talk about spending in specifics. coming up straight ahead on this show, everyone wants to know what their future holds in the new year. i don't know. steve and juliet don't know. but they're going to talk to somebody who does know. >> steve: an astrologer. >> juliet: you don't want to -- you want me to write down a question. >> brian: i think the american people should go first. >> juliet: absolutely. plus, some lawmakers quenching their thirst for ban or plastic bottles. business owners will be paying the price hi. we're spreading the word about honey bunches of oats fruit blends and the unique taste combination like peach/raspberry. with one flavor in the granola bunch and one on the flake. two flavors. in harmony. honey bunches of oats. make your day bunches better.

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continued to reimburse planned parenthood for basic health care for women. and people in concorde, massachusetts are saying good-bye to 2012 and to bottled water. new ban on selling the plastic bottles has gone into effect today. it's all part of an effort to cut down on waste. stores selling it face a $50 fine. juliet? >> juliet: brian, thank you. with the new year comes new changes to jobs, the economy, your personal life. who doesn't want to know what the future holds? here to answer the e-mails you've been sending us all morning, susan miller is back. so i asked last hour to have viewers send in some e-mails and now i will put my spectacles on. an e-mail from amy in new york who says her daughter was born october 10, 1968 at 11:58, queens new york, she's wonderful, but her personal life is miserable. will 2013 be better for her? >> first of all, yes. she's a libra and libras have

walked the gauntlet. >> juliet: she's right around mine. >> yeah. i love it that this lady is asking about her daughter, she really cares about her. this child is going -- she's not a child, but i'm saying this person is going to change the world and keep going back to school for advanced degrees no matter how old she is. this is a very educated person and wants to know more, is curious about the world. she'll probably meet someone just as educated. mom shouldn't worry. this child has an aspect similar to george washington and abe lincoln. >> juliet: whoa! >> warren buffet and bill gates. >> juliet: amy in new york is stoked. >> she's a mover and a shaker. i love this chart. so amy, do not worry. >> juliet: amy's mom, you need to write back and let us know. you are amy. write us back and let us know what you think about what she said. second e-mail, this is kristy in california. born march 14, 1942, 9:20 a.m.,

san francisco. my financial situation improve this year? will i be able to buy a house? >> i love her question. first of all, pisces, best part of their life is the home. now, that means buying the house is a perfect idea. jupiter has been direct t. goes direct january 30. she will way the house. she needs to get it done by june 25. but there is a beautiful new moon in the beginning of june. so if it runs close to june, don't worry. i say she's getting the house. all pisces that had problems with money, it's going away. >> juliet: that sounds good. this is e-mail from jackie, mississippi. what should i focus on in 2013, born january 29, 1962. natchez, mississippi, 1:30 p.m. >> well, jackie has gemini rising. i hope she is in the communication business 'cause she's a brilliant thinker, writer, speaker. she has a whole line - up of planets in aquarius. she could work in politics.

she can work on the internet, anything new, electronic, software, telecommunications. she has a brilliant chart. for all those aconveyer young planners -- aconveyerian planners, love, love. i haven't had good things to say for aquarians for a long time. >> juliet: let's say you were a libra and hoping to have a child in the near future. will your hopes come alive? >> you know, now that jupiter is luck, it's called trying -- the most heavenly aspect you could ever get. so i would urge you to conceive before june 25 'cause jupiter moves. >> juliet: i got to get on it! >> you got to get on it. >> juliet: that's good news. >> it would be a sweet baby. >> juliet: it would be darling. i'm telling you. are we going to see you again?

>> i'm staying here just in case you have time. >> juliet: okay, good. >> i would like the questions to be specific. >> juliet: get more specific, people, if you could. okay. thank you very much. >> thank you. >> juliet: you stay right there. we'll take a quick break 'cause you'd be paying $8 for a thrall -- i don't know, could you be? susan, tell us. the outcome of the dairy cliff is coming up. on this day in 1990, another day in paradise by phil collins was the number one song. [ male announcer ] how do you make america's favorite recipes? just begin with america's favorite soups. bring out chicken broccoli alfredo. or best-ever meatloaf. go to campbellskitchen.com for recipes, plus a valuable coupon. campbell's. it's amazing what soup can do.

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>> steve: the fiscal cliff as it turns out, we may not be going over the dairy cliff after all. >> brian: the white house and

congressional leaders came to a last-minute deal preventing prices of milk from doubling to nearly $8 a gallon. joining us right now with her reaction is farm owner and board member of the united dairy industry association, audrey donahue. you do not have to work the farm today, but you are relieved. >> yes, we're very relieved. i too, am a consumer. i have to go into the grocery store and purchase milk and dairy products. as a dairy farmer, i was very concerned 'cause we certainly don't want consumers to not continue to buy dairy and dairy products. at that he is a very important part of a diet. we need to have three servings of dairy a at this in everybody's diet. it's very important for our children as well. >> steve: so why was it going to go up to 8 bucks a gallon? >> what was going to happen, it was going to go back to some laws that we had in the late 40s which was based on what it cost to produce it. so without having that farm bill go through, that's what we would have done. we'd have gone back to an old law that was enforced. >> steve: what they've done with the so-called dairy cliff, they

have kicked the milk can down the road for another year. but that's good for you 'cause it means that prices will not be going up. >> absolutely. it's very good for me. dairy farmers were very concerned about that. we're kind of going through a stage right now where we don't have the consumers drinking fluid milk like we'd like to see it. they're still consuming dairy products, which is great. we have to have those three servings of dairy a day in your diet. they're shifting more towards the cheese and the yogurts and it's so important to grab that glass of milk for a dairy farmer because economically, that's where we make the most money on our farm. we get paid the most for fluid milk. so what have we done? we take great care of our cows, our land, we produce a good wholesome product that's safe and healthy. now we have to take care of the consumer. so that's exactly what we've done. we've become more innovative. we have really been into the marketplace and we have new products now. we have lactose free milk, low fat, low sugar, flavored milk

and that's exactly what we're going to do. what do you want as a consumer? we're going to take care of you and wed into to be more innovative in that marketplace. >> brian: what do you say to people like senator harkin who didn't vote for this because he didn't feel like it was addressed to this correctly. there is no long-term answer addressed in this. >> no. but we need dairy farmers. it helps the economy as well as it does -- we produce a great product. we help the economy, too. the infrastructure of our business, we do business with a lot of people. we do a lot of business with other people. we have the veterinarians and the feed salesmen and nutritionists, all these people working with our cows and our land. we need farmers. it's an economy booster and providing a very healthy and nutritious product to consumers. it's an american-made product. when you think about a glass of milk, it's an american-made product. it's locally grown, and the essential vitamins in this -- >> steve: it's more american than apple pie with a big glass

of milk. >> and a slice of cheese, exactly. >> steve: before you go, you don't live in the washington, d.c. area or new york city, you're out on a beautiful dairy farm. looking in on washington, d.c., how it only seems like they get stuff done when they're in the 11th hour. it's frustrating to awful us. got to be to you as well. >> it is very frustrating. i'm a fifth generation dairy farmer. my family has been producing milk for 150 years. i'm very proud to say after my son got done with college this spring, he has come back to the farm. he is a sixth generation dairy farmer. we need us in america. i want to see this continue. i want to see my son stay on the farm. so yes, you're right. they make decisions at the last minute and we don't want that. we want to have dairy farmers stay here for a very long time. >> steve: sure. >> brian: thank you very much for joining us. we appreciate you coming down today and from your perspective, we don't get enough from the people that are out there working 20 hours a day to make

ends meet. >> thank you very much. >> steve: the thing about a dairy farm is those cows don't go on holiday. so while she is here being on the show this morning, her husband and the son were milking the cow. >> brian: the cow saw the show and thought i get the day off. wrong. thank you very much. >> thank you very much for inviting me. >> brian: straight ahead f your child witnessed the sandy hook and survived, should you be able to sue the school for emotional trauma? that debate next hour. >> steve: we've all heard of bring your own beer. now it's going to be legal to bring your own pot? that's what one state says and that is coming up aig? we said we were going to turn it around, and we did. woman: we're helping joplin, missouri, come back from a devastating tornado. man: and now we're helping the t recover from hurricane sandy. we're a leading global insurance company, based right here in america. we've repaid every dollar america lent us. everything, plus a profit of more than $22 billion.

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>> juliet: happy new year, everybody. today is tuesday, january 1. brian? 2013. happy new year. i'm juliet huddy in for gretchen. we officially went over the fiscal cliff, but at least senators managed to cut a late

night deal. >> shouldn't have taken us this long to come to an agreement and this shouldn't be the model for how we do things. >> juliet: next stop, republican controlled house. will they pass the senate's bill? >> steve: newtown still grieving over the tragic loss of innocent school children and faculty and now a lawyer on behalf of a six-year-old survivor, is looking to sue the state of connecticut for i believe $100 million. this hour, connecticut's attorney general responds. >> brian: all right. out with the old. in with the new. millions ringing in 2013 around the world. "fox & friends" hour three starts now. ♪ .

>> four, three, two, one! >> juliet: gives me chills. >> steve: that's because it was chilly. queue guy lombardo. welcome to 2013 brought to you give bitoshiba. >> brian: by the way, the party is still going on. if we can go out there live, it is like -- oh wait a second. they cleaned it up! they opened it up and we're able to drive down broadway just like that! >> juliet: did you see mayor bloomberg in that last shot with the rockettes? he is just -- just amazed by that. you should see the way he's glowing. hysterical. >> steve: i got nothing on that. >> juliet: i know. he's been talking a lot about them lately. he gets all giddy when they come about. very funny. >> steve: welcome to 2013 and we start with a fox news alert. let's talk a little bit about a

hangover because last night the people on the senate side of that round building down in washington, d.c. did pass their version of what they hope will get us through this fiscal cliff. they decided that this was a deal brokered by joe biden and mitch mcconnell, the republican. >> brian: what does that say about harry reid who was bypassed? >> steve: harry reid stopped returning their phone calls. so eventually mitch got on the phone and said to harry, hey, do you mind if i deal with joe biden? i worked with him before. so they came up with this deal which has now passed the senate. it's going to go on to the house. they're going to convene a little later on today. will they bring it up? don't know. will it pass the house? don't know that either because there are a lot of republicans who do not like the idea of raising tacks on anybody. >> juliet: here they are. the taxes rise for singles making over $400,000. couples earning $450,000. dividend and capital gapes taxes, those rise 20%. the inheritance tax rises 35 to

40%. unemployment insurance does remain for a year. >> brian: and there is much more facets to it when you look at dividends and capital gains. it's going to go up from 15%. because you have done something horrible, you made a profit. then something else that byron york told us before our interview, he said keep in mind, capital gains goes up an additional 3.8% to pay dividends to pay for obamacare. so now if you have -- if you're an investor and say should i put my money in this, when i get dividends back, i have to factor in a profit margin, minus 23.8%. don't tell me those smart men and women on wall street aren't going to react to that in how they invest. >> steve: keep in mind, today, january 1, 2013, $1 trillion worth of new obamacare taxes go into effect. >> brian: why didn't that happen before the election? i have no idea. >> steve: you know, we're supposed to not use the

expression kick the can. they were kicking the can down the road past the election and now here we are. so there were nine u.s. senators who voted against this thing. who are they? we're going to put up a graphic. bipartisan in the opposition, as you can see, harkin, carper, lee, paul, shelby, bennett, grassley, and marco rubio voted against it. rubio said look, i just ran -- i was elected here to the senate to do something about big problems. this is not doing anything to address america's real financial crisis. >> brian: shelby ripped it big time. rand paul was never close to signing off on it. the other thing, in the opposition, in terms of the democrats, the biggest surprise, bennett. he's part of leadership. he was in a tough election fight and now says, i can't go along with this. i don't really believe we should be raising taxes. >> juliet: once this went down, you saw -- we saw images of vice president biden who was very happy, who was walking through

the reporters, yeah, mitch mcconnell doesn't quite have the same energy about this. this is what he had to say. there is the vice president after the deal has been cut walking out smiling, very happy about it, you know. thumbs up. here is mitch mcconnell's reaction. >> shouldn't have taken us this long to come to an agreement and this shouldn't be the model for how we do things afternoon here i. know i can speak for my entire conference when i say we don't think taxes should be going up on anyone. but we all knew that if we did nothing, they'd be going up on everyone today. each of us could spend the rest of the week discussing what a perfect solution would have looked like, but the end result would have been the largest tax increase in american history. so it took an imperfect solution to prevent our constituents from a very real financial pain. >> steve: for a lot of republicans, it's going to be real pain in the house because keep in mind last week they voted down the republicans did,

the so-called plan b, which boehner had the cap on tax increases at $1 million. now they're going to vote on it 450, which is less than half that. the thing so many republicans said we have to address the amount of money we spend in this country. when you look at the ratio between the tax hikes and the spending cuts, it's jaw dropping. $620 billion in new tax hikes, but they're only cutting 15 billion. if you want the ratio, that's 41 to one. for every one dollar in spending cuts, they increase taxes $41. that's a big number. >> brian: the president did not get the original money that he wanted with stimulus 50 billion a year. he didn't get that. he wanted 250. he wanted the threshold at 250. if you made more than that, your taxes would go up. he didn't get that. so he also didn't get control of the debt ceiling, which he initially wanted, which got a loft republicans literally

laughing out loud when he requested that. this fight is only postponed for another two months and they found $24 billion to allow sequester, to be sequestered for two months. so we'll see this fight come up again in february. >> juliet: this spending issue is being addressed, at least it is by republicans. listen to mitch mcconnell. >> now it's time to get serious about reducing washington's out of control spending. that's the debate the american people want, it's the debate we'll have next and it's a debate republicans are ready for. >> steve: you got to figure there are a number of members of the house of representatives on the republican side who this morning are waking up saying, hey, why didn't we pass plan b again last week? 'cause plan b was better for our side than the president's. >> brian: the thing is that plan b wouldn't have had a prayer in the senate, but it would have been a negotiating point had they gone back. i'm curious to see if we'll be

hit sitting here friday saying the house rejects this, or comes back with these suggestions how to make it better, than in comes mitch mcconnell and harry reid again. >> steve: had the house passed plan b, it's always easier to negotiate down from a million rather than negotiate up from 250, which is what mitch mcconnell had to do. but he was able to get it up to 450,000. if you are just waking up and need detail, we'll be talk being it all morning on this special education of fox friends friends. >> juliet: and if you want to see what's happening around a the world, we will show you. countries all across the world rang in the new year today. vatican city hold ago special mass to celebrate. ♪ pope benedict xvi leading a mass with prayer and singing. the ceremony kicked off at 3:30 this morning eastern time at saint peter's basilica in vatican city. and a million people packed

times square in new york city to ring in the new year. there he is with the rockettes. there are those kissing bandits. estimated 2,000 pounds of confetti flew through the air. >> steve: that's all? that's it? >> juliet: i know. the waterford crystal ball dropped. in houston, hello, let's talk about houston. rain there. but it didn't stop thousands of people from heading downtown for performances and fireworks to celebrate the new year. in baltimore, beautiful inner harbor area, fireworks lit up the harbor to welcome 2013. well, hugh hefner's face lit up as he married the woman of his dreams. the 26-year-old crystal harris. they tied the knot at the playboy mansion when the clock struck midnight. that comes a year and a half after the couple kind of like had a big breakup.

they were supposed to get married. she dumped him right before the wedding. >> brian: i remember it like it was yesterday. >> juliet: yeah. i don't know what the story was, but they got back together. congratulations to hef and his lovely bride. >> steve: i'm sure he's waking up in pajamas today. he always wears them. >> brian: probably got married in them. >> steve: he has i think several times. meanwhile, straight ahead. >> brian: we love flannel. >> steve: thank you for joining us on this tuesday. if your child witnessed the sandy hook shooting and survived, should you be able to sue the state of connecticut for emotional trauma? we'll report on this story with the attorney general of connecticut coming up next. >> juliet: then completely separate tax hike that goes into effect today. it's separate from the fiscal cliff, another trillion dollars, obamacare, what it means for you, why you are health, your wallet, all that coming up [ male announcer ] coughequence™ #8. waking the baby.

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>> steve: welcome back. new haven, connecticut lawyer is asking to sue the state of connecticut for $100 million on behalf of a six-year-old survivor of the newtown school massacre. watch this. >> the whole thing came in over the intercom down to the screaming and the cursing and the bang, bang, bang, and her friends are dead and that's trauma. i'm saying for a fact that the state didn't do enough to provide for their safety. the state of connecticut and other states, too, are failing to protect the children from guns. >> juliet: joining us with his statement is connecticut's attorney general, george, thank you for joining us. first of all, our notes say that he was supposed to come on, but he has said he can't because he says, quote, new evidence has come in. i am postponing interviews until i can investigate the credibility of it. your reaction when you first heard he wanted to do this? >> there is nothing that can diminish the enormity of the tragedy in newtown and the

wounds are still very fresh and the scars are not going to heal for many, but the simple truth is that the facts don't support a lawsuit and there is no legal theory that he can come up with that would sustain a lawsuit. so we will vigorously defend the state and its taxpayers. >> steve: okay. so george, explain this to us, if you try to sue the state, you've got to first ask the office of claims commissioner whether or not it would be appropriate to do so? >> under sovereign immunity, the state has to grant permission to sue. that can be by statute, for example, if somebody driving a state car hits you, you can sue. but on general torts and legal theories, you have to get permission and you have to make a case to the claims commissioner that you have a reasonable lawsuit that the state was really the cause of the harm. >> steve: so then will the claims commissioner decide whether or not this is

appropriate? >> the claims commissioner will say -- there is a strong case the state was liable or not a strong case. we believe there is not a case at all. >> juliet: people watching are saying, well, it's the state deciding whether or not the state should be sued. correct? >> we grant permission all the time when there is a reasonable case. every time there is a trauma such as this? the facts don't sustain his case, the facts are really clear that the state really had no role whatsoever in preventing this terrible tragedy. >> juliet: here is what the law said. he says the claimant is jill doe. she heard screaming, gun fire and violence over the intercom system. conversely, we've heard this since the day of the shooting, that authorities say that the intercom, had it not been turned on, people might not have known what was going on. more people could have been killed. >> i think that's a fair point.

the simple bottom line is that the state is not responsible for local school safety. it's a local issue and that doesn't mean newtown is liable. newtown did everything in our judgment, that it could have. but the bottom line is that if you open the gates to liability in a case such as this, where would it stop? >> steve: that's such a good point. we did hear mr. pinsky say that one of the reasons he was suing for $100 million was because the school did not do enough to protect the students. but as we know now -- >> he shot his way in. >> steve: how do you stop that? they had the buzzer. it sounds like some of the personnel, the principal tried to stop him with her body. it sounds like they did -- >> they ran to the shooter. they did everything they could. again, the facts don't support this and there is no legal theory that he can spin that supports a lawsuit. we're going to defend

connecticut's taxpayers. >> juliet: connecticut attorney general, thank you for joining us today. we appreciate it. >> thank you. >> steve: tough case. >> juliet: yeah. washington worked hard into the night as we've been talking about all night long. and morning. but why did it have to come down to the wire? did the american people get a raw deal because it was pushed to the last minute? >> steve: plus, you said good-bye to 2012 and now you could be saying good-bye to popular and overused phrases. >> juliet: i think fiscal cliff is one. >> steve: that's one. bucket list. what else? it's coming up. ♪

♪ music kids will spend 22 minutes watching us, the super duper party troopers, sing about ants in their pants. brushing for two minutes now, can save your child from severe tooth pain later. two minutes twice a day. they have the time.

>> brian: despite the last minute deal passed by just the senate just a few hours ago, the u.s. has technically fallen off the fiscal cliff. the house hasn't voted yet. the president hasn't signed it. so why couldn't washington solve this earlier? i'm joined by democratic strategist debbie dangle and spokesperson more the american majority action fund, ron myer. ron, do you believe it is just atypical to this era of congressional leaders that we need the bringsmanship? >> frankly, i think it's typical of this era that we have to wait 'til the last minute to pass everything and that's not a way to run things. this was planned all along to wait 'til the last minute so people would be grateful that something passed. it's totally unbalanced. 41 to one tax hike to spending cut ratio. it's crazy to say that the president all along has been

advocating for a balanced approach and this is where we ended up. really we've been holding out, running the clock so that we could pass something that the democrats love a tax hike with no spending cuts. >> brian: we know this, the cbo says right now people -- in their own savings and own investing, debbie, we know it will provide less than a trillion dollars over the next ten years and we're a trillion off kilter each and every year leading up to that. so he's technically, ron is 100% right. >> what you're missing today is simply preventing the going over the fiscal cliff in the sense that millions of americans aren't gog have their taxes increased. quite frankly, nobody is happy. republicans or democrats about this bill. everybody is kind of holing their nose and voting for it because we do have to reduce the budget in this country and it's very hard to get agreement on how we're going to do it. but the reality is 98% of americans should not see an increase in their taxes.

to kick the can down the road for two months, we're going to see another drama, what i call new march madness, like we have never seen in march. unfortunately, even to get to this point, to get the votes that we needed to postpone or make permanent, one of the things that is happening is that these bush tax cuts have been made permanent for 98% of americans. you had to get the drama so people could sell it. >> brian: let's talk about this, what's going to happen now. you think march will be big, i think tomorrow and today is going to be big when we talk about the debate in the house. ron, bring us inside the house debate. is this thing going to pass? what's going to be at stake? >> it may pass, but it won't have a majority of the republican support. in fact, i think it may have as few as 50 votes in the house and it may not even be voted on by john boehner. john boehner may vote no on this plan because he needs to save face. if he has to pass this with as few as 50, he might want to save face for his own election in two days and vote with the conservatives on this. i think that could very well happen. this plan, i was talking to

members this morning, it's wildly unpopular in the gop caucus. they're upset about it. working with joe biden, i think this shows where it gets you. we're basically tossing young people off the cliff. we're tossing this fiscal battle off the cliff and giving away all of our leverage and not doing anything to help the american people in the long run. we'll tank the economy. this was just poorly done by republicans from a negotiating standpoint. >> brian: debbie, wouldn't you have felt better if we were debating the pros and cons of simpson bowles and trying to hash that out? wouldn't we feel so much better about that process? >> yes. actually i would. i hope that we can get back to a simpson bowles process. i don't think anybody is trying to throw anybody off a cliff. one of the things that our founding fathers did was to come up with the art of compromise. nobody is happy. so maybe that means something today. >> hold on, we're definitely trying to throw the quote, unquote, wealthy off the cliff. no doubt about that. president obama said this is just the beginning of the tax hikes yesterday. they said is just a start. we'll look at it again when we're talking about negotiating

for the debt ceiling. so this is just the start of wanting to throw job creators and people that give my generation jobs off the cliff, saying we're going to somehow balance the budget off the wealthy. we could tax the wealthy at 100% and still wouldn't be able to close the deficit. we wouldn't be able to cut it in half. to say we're going to prune our economy just for the sake of obama's class warfare and his ideology, i think it's sad. >> i'm not into strident language right now. i think republicans and democrats agree we've got to reduce the budget deficit. so i would like to see us get back to a simpson bowles. we've got to have real conversations that everything is on the table, where all generations are having the discussion, our young people are 25% of our population, but 100% of our future. so we do care. >> i hope obama is with you. that's all i can say. but he's not. >> brian: i was looking at what you would say a democratic friendly blog site and they said leverage lost. they were saying how the president blew it.

so it just goes to show you perception is back and forth unless they're pretending as if they lost. i wonder if anything is going to be different on the debt ceiling. is there any more leverage that the republican house has that they did not have in this debate, did you see, debbie or ron? >> i think they have to use the leverage of the debt ceiling saying hey, this -- this is one thing that's important to point out f. we hit the debt ceiling, it means we have to run a balanced budget. so it's not the end of the world. yes, we have to make cuts. but guess what? it means we have to run a welled budget until we can figure out where to go from here. it's not the end of the world and republicans need to treat it like that because we have to get something done. in the next four years, if we keep punting this and kicking the can and not doing anything to address entitlements, my generation, folks my age and even people who are middle age now are going to not see these benefits anymore. they'll see increased taxes to pay the interest payments every year on the debt.

>> brian: last point, debt? >> i would say that what we need is a lot less taking shots at each other and wed into to go into a room and have very serious conversations. everybody has got to givement it's got to be a mixture of revenue increases -- >> what did you speech about that -- about that speech yesterday? that was awful. he just came in and took shots. i have think you agree with that, debbie. >> let's just say i hope that march madness isn't as bad as i think it may be. >> brian: right. i think we agree the interview on sunday was no walk in the park either. thanks very much to both of you. enjoy your debate. >> happy new year. >> brian: same to you. straight ahead, another tax hike goes into effect today. you can thank obamacare for that. and we've all heard byob. now it's bring your own pot. that's the new thing in one state. we'll tell you about it

you

>> steve: take a look. believe it or not, they've already cleaned up the cross roads of the world. >> brian: it took forever. >> juliet: stop it! the city of new york sanitation department is par excellence.

>> brian: and they are french. >> juliet: it's always fun cop not guilty in the morning when new year's eve revellers are starting to filter out of the area. >> steve: they're still living it up when we drove in. i'm looking at a site in new york where you can buy all your tickets for the festivities last night. if you're still interested in partying, i understand there is an after party right now at a place called amnesia. >> brian: really? i forgot they were having a party. >> steve: there is one at avenue >> juliet: that's downtown. >> brian: when are we going to get the invite to p diddy's? remember we were promised that. >> steve: you've been lobbying for that. >> juliet: when were you promised? >> brian: by him. he said we would be conveniented to all the parties. he famously throw has party in the hamptons. >> brian: he invited us. i had no idea he was not going to live up to the invitation. >> steve: maybe in the coming

year. >> brian: yeah. >> juliet: he's diddy, not p anymore. >> brian: it's p? >> juliet: isn't it? let's look that up while i do my headlines. even though the senate has passed the fiscal cliff deal, the bad news is taxes are going up regardless thanks to obamacare. five new taxes under obamacare will start going into effect. they affect everything from health care costs to the cost of medical devices, as we talked about earlier with a gentleman. the congressional budget office says this is a $1 trillion tax hike over the next decade. secretary of state hillary clinton spending another night in the hospital. she's battling a blood clot. doctors now revealing the clot is between her skull and her brain. right behind her ear. her right ear. didn't cause a stroke or brain damage. it was discovered during a follow-up exam for a concussion she suffered from a fall in december. doctors are treating her with blood thinners and say she's making excellent progress and expected to make a full recovery.

and byop? colorado has opened its first recreational pot club. it's been just a month since pot was legalized in that state and as soon as this private club was created, 200 lucky folks quickly signed up. they ran over there with their munchies. colorado's pot law prohibits public smoking. it doesn't include clubs. no pot is sold inside. you have to bring your own. 2012 is out and with it goes some of the most overused and played out phrases. anybody have any suggestions as to what should be thrown out? >> steve: fiscal cliff. >> juliet: okay. you're right. it's thrown out. lake superior state university, they said these are the worst that should be banned from the english language. fiscal cliff, spoiler alert,. >> steve: i like that one. >> juliet: bucket list. trending. and brian and i had no idea what this is, yolo. >> steve: you only live once,

baby. >> juliet: or you lob. >> steve: time for sports. >> brian: it was a bad day for the country yesterday because you talk about a fiscal cliff and the markets reacting and it was bad to be an nfl coach that didn't make the playoffs. every time you turn around, someone is getting fired. seven coaches fired, five gm's fired. just in one day in 2012. the last day of 2012. among the casualties, chargers coach turner, eagles coach, expected months ago. bears coach, smith. the bills, browns and cardinals said good-bye to theirs. this is the fun part. fox sports.com learned the bears and eagles are looking at offensive coordinator of the broncos who helped peyton manning transform his career, as well as tim tebow for a while. mike mccoy. reid is set to be putting together a staff and chiefs and eagles and browns are interested in dirk cutter.

with the nhl season skating on thin ice, there seems to be some positive movement. they're talking! the players association submitted a counter proposal that happened yesterday. the two sides meet today. in order to get a season, a deal would be reached by next friday or forget it. all of a sudden this sense of urgency, but before this week, the sides hadn't met since december 13. normally it's that special day when they play outdoors, not this year. we are rolling now right along with the middle of the college bowl season. in the back stretch. we have a few great games on tap for you to take in if you're not watching news. clemson won yesterday over lsu in the chick-fil-a bowl. they kicked this game winning 37-yard field goal as time expired. a comeback in their win. today's games, outback bowl. south carolina takes on michigan. georgia and nebraska will square off in the citrus bowl. and stanford meets wisconsin in

the rose bowl. that should be fun. and that's it for the fun and games. now let's talk dollars and cents. >> juliet: yeah. fiscal cliff deal is on the table. but the hours vote on it. how could this proposal affect the economy? what happens if the house injects it? >> steve: talk to that guy now, "fox business" network's charles payne. charles, it is past the senate. chances are it's probably going to pass the house. what's it mean for everybody watching? >> i got to tell you, i guess we always kind of knew there would be some sort of ultimate compromise, at least everyone sort of felt that way. it's not good news for the economy. it's certainly not good news for small businesses who still are being really going to be hammered. you have been talking about obamacare taxes, they'll be hammered by that. they'll be hammered by this dramatically. let's just say, for instance, you're a chiropractor and off gross margin of 15%. all of a sudden your taxes go up, your business taxes go up. are you going to cut your salary

or hesitate on hiring someone? i mean, this is where all the -- a lot of jobs have been created by small businesses. you'd be shocked how many businesses with less than 20 employees, they've been just these little engines beneath the surface chugging along, keeping us above the surface. and that gets hit pretty good. >> steve: with the senate proposal, it goes from about 35 to almost 40%. with your hypothetical 15%, that chops 5% off right there. >> absolutely does. of course, you pointed out how heavily weighted weighted this s spending. listen, the market was up big yesterday. the stock market was up big yesterday, in part out of just a sense of relief. also in part, out of a sense of it could have been worse. but this does not help. it's not a pro-economic bill. >> brian: as you point out, they were talking about dividend taxes going up to 40% instead of going up to 20%, adding obamacare 23%. they also talk about that it could have got a lot worse in

terms of the threshold on income. could have been 250. it's 400. >> right. those are concessions. i think relatively small concessions with respect, again, to small businesses. what i found shocking was the payroll tax cut. the reason i found this shocking is not that i'm a proponent of it, but when the president promised taxes wouldn't go up on regular folks, guess what, regular folks, it's going to go up and you're going to see it immediately. i was surprised by that. but they kept the unemployment extension and that's another $30 billion. a whole lot of earned credits, child credits. whole lot of things that were originally in the stimulus package continued. so i guess that was the choice. people who go to work every day are going to get hit pretty good to support people who don't go to work every day. obviously we're compassionate nation, but again, getting back to the notion from an economic point of view, at some point we need a pro-growth policy, pro-growth agenda to really get

us out of this mess instead of borrowing, taxing, penalizing. >> brian: no budget! we don't even have a budget for three years. now none for a fourth year because we're so busy negotiating all this stuff. >> speaking of which, you can't wait for the debt ceiling, which is the next big giant hurdle to go through. >> steve: you know when is celebrating? people who work up on capitol hill, the president by executive order upped the pay for congressmen, goes up about 900 bucks for the average rank and file member. joe biden gets a pay raise. he's up to 231,000. portman in the senate has drafted legislation to rescind it. michelle bachmann in the house said this: i'm calling on my colleagues in the house and senate to rescind president obama's executive order that gives members of congress a pay raise. this executive order was not requested by congress and we should reject it. we have a spending problem in

our country and we should be looking for areas to cut. >> absolutely, guys. this is an embarrassment. it really, really is. >> steve: but they're very effective on capitol hill, what are you talking about? >> brian: they're supposed to get a cost of living increase, but they forego that for the last couple years. >> keep foregoing it. if you campaign on shared sacrifice, if you keep talking about the billionaires billionad millionaires, when you're really talk being small businesses, moderately successful americans who have done everything right, including a tremendous amount of sacrifice, it's an embarrassment that you would give yourself and your colleagues this kind of a raise. remember, 100 million people are going to go to work this week and when they get their next check, their payroll tax will come back. remember the white house, if you go on their web site, but remember all the videos that show how important that extra 40 bucks was, how it changed people's lives? so that's gone, but you give vice president biden a raise? are you kidding me? >> brian: i remember the family

couldn't get pizza. now they can't get pizza again. >> yeah, well. i just think -- none of this is economic, guys. realistically n a real -- >> steve: it's all politics. >> it's politics. it's division, it's divisiveness. it does nothing to help our country. >> brian: simpson bowles debate would have been worth it. tell them what's good and bad about that, getting your hands dirty and trying to rebalance the budget. >> i think the big problem for the politicians is when they do the right thing, it's like planting a seed and ultimately when it does spring that fruit, they'll be gone. they won't be able to take credit for it or the victory laps that we have to live through all the time after these kind of little bogus deals are cobbled together last year. go through this drama two or three months down the road. it's all self-serving and all ridiculous. >> juliet: that's why polls show americans have a horrible opinion of the way congress is. >> they really should have a horrible opinion of the way congress acts. the real fiscal cliff beneath

our feet is the $16 trillion in debt that's going to continue to go higher and higher and the lost opportunities. this country is nowhere near living up to its greatness that we possess. nowhere near it. >> steve: let's see. we're just starting a new year. we can be optimistic burks -- but relickicly? >> it could have been worse. >> juliet: thank you, charles. happy new year. >> brian: that could be the cover of anthony robins you -- new book. >> juliet: still ahead, have you made a new year's resolution, chances are you did. father john shows us how faith can help you keep it. >> steve: how about dinner and drinks wednesday night with the girls? forget it. we'll tell you who is pulling the plug on ladies night.

oh, oh ♪ fare thee well ♪ farewell ♪ mr. gloom be on your way ♪ ♪ though you haven't any money you can still be bright and sunny ♪ ♪ sing polly wolly doodle all the day ♪

♪ hah

>> steve: we got quick headlines for you on this new year morning. sea sick, over 200 people have gotten sick on this cruise ship in the caribbean. federal health officials say the virus causes stomach and digestive problems to passengers on the queen mary 2. last week 200 people also got sick on it, on a separate ship. talk about last call forever, a new law in australia is banning ladies night. it's part of an effort to tackle

binge drinking. some in the bars found loophole that said if the deal applies to everyone, it's okay. so they might be offering a free drinks to men on ladies night. mr. kilmeade, juliet. >> juliet: no, no, doesn't work that way. talk about that later. >> brian: perfect segueway. chances are you made a new year's resolution. already people have said doing it to -- have been doing since the days of julius caesar. many turn to faith to help them keep their promises and reach their goals. >> juliet: father jonathan morris joins us live. have you made any new year's resolutions. >> chances are people have not made them. most people who are watching us either probably are not in a state of understanding us, 'cause they haven't gone to bed yet, or they're so good anyway, that they probably don't need to make a new year's resolution. but my suggestion is two fold. one is that we look for deeper motivation to keep new year's

resolutions. we can all say, i want to lose ten pounds. i want to try to be nicer to somebody. what are the deep motivations that can help us really be faithful to our new year's resolutions? i have two scripture passages i would like to show to all of you this morning. the first one, they're going to put on full screen. if not, since i have the -- >> juliet: there we go. >> here is one, for you are dead and your life is hid with christ in god. this scripture passage is recognizing we have sinned. okay? that we have sinned, but that there is new hope. the scripture says you are dead, it means we have sinned and we messed up, but we can start again and that our life has hidden christ, meaning we are connected to jesus, who is offering a us a new possibility. that's one. that there is hope for us. the second one, here is this from peter 1, verses 4: to an inherent incorruptible and undefile in that faith does -- that does not fade away reserved

in heaven for you. that's king james version, it's very hard to pronounce. but the point here is that there is hope in heaven! you can go to the scripture and you can find motivation to keep going. here is the second motivation that i suggest to awful you. this is more less scripture, a little more rational, i would say. is this: ask some people you trust. ask some people you trust. i did this with five people. ask people you trust to give you two suggestions, put them in an envelope, type them up, of things you -- that you should be working on. >> juliet: it's scary. >> it's tough, right? because it's very easy for us to say, i know i need to do this because i want to change this anyway. but what about the things that you need to be working on that we are not able to grasp ourselves? i put that suggestion on my facebook and twitter and i meant saying i'm doing this with family and friends that i trust. people thought i was saying i need their suggestions and so

people started putting all this stuff on. [ laughter ] but it was very funny. >> brian: that is fascinating. my problem is that no matter who i ask, they all agree that i'm perfect. >> really? >> brian: and i find myself in this quandary every new year. >> you need to ask people who you trust to people the truth to you. i'm happy to do is it t. >> let's do it together. really to be serious, okay? 'cause i know you like to be serious, ask people, for example, your wife or someone else to write down the things that you could work on this year. >> brian: she'll be at it all day. >> steve: keep it to three. >> tell her to keep it to three. i'm going to send you an envelope with my suggestions, so you don't know it's me. things you can work on. >> brian: okay. >> the point here is take the new year seriously to too

something you don't feel like doing, but it will make you feel better and more i couldn't night to do god and people you love. >> brian: thank you for coming in. >> i'll try to get the real estating of scripture down better next time. >> brian: you nailed it! i blame king james. not father jonathan. >> juliet: all right. coming up, after missing the midnight deadline, the senate cut a fiscal cliff deal in the overnight hours. but we're not out of the woods yet because the republican house still has to vote. so what's going to happen with that? texas congressman jeb hensarling is next. >> brian: the government pulls the plug on a popular light bulb. the alternative will cost you more. it's called a candle. ♪

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>> steve: if you're just waking up, fox news alert. last-minute deal cut in the u.s. senate last night, early this morning to avoid a major tax hike on every american. only problem, the house is not voted on it yet and the president hasn't signed it. so technically we we want off the cliff last night at midnight. so what do? a member of the house of representatives, jeb hensarling joins us from washington, d.c good morning to you. >> good morning. >> steve: all right. so the house is going to get that later today. we know you're open for business. are you going to vote on it? >> well, we are open for business, but it would be nice to at least have the opportunity to read what the senate has done. we passed our bill to prevent all tax increases on all americans back in july, so the senate had months to look at that. we passed our bill to keep the sequester savings, but to do it in a smarter fashion back in september.

the senate's had months. the democratic controlled senate had months to look at that and now they're expecting us to vote on something they passed hours ago without reading it? i don't think so. but i would hope we would take a look at it. if we have to study it, understand it. this cannot be a bum's rush dealing with something that's going to impact so many people. but what republicans have tried to do is prevent tax increases on small businesses, on working families and to get to the root of our debt crisis, which is that we have a spending-driven debt crisis promoted by the president and regardless of what's in this deal t doesn't take care of the spending-driven debt crisis that unfortunately could lead us down the road to being greece one day. i'm concerned looking at the press reports of this deal in the senate is that it actually includes new spending from the president. >> steve: it does. you have been on this program and you've talked about the importance of spending cuts, real meaningful spending cuts

with the way we're spending our nation's treasury right now. but you look at it, they are going to raise taxes $41 for every one dollar that they cut. i know that just -- too bad we don't have one of those blood pressure things hooked up on you. i'd like to see that number. when the house does take this up eventually, i would manual there will be amendments tacked on, knowing john boehner. if you had to make changes on this, what would you like to see included? >> the first thing is there should be zero, zero new spending in this. under the president, in four years he's amosed more national debt than in the previous 200. this is unsustainable. tax revenues are about where they were five or six years ago. but spending under him has increased 20%. that's why before he became president, what used to be annual deficits are pretty much now morphing into monthly

deficits under him. the most important thing is he can't get there with tax increases. you give the president every single job crushing tax increase he's requested, it's about two to 3% of his spending agenda. it's about 15 to maybe 17% of the additional five to $6 trillion of additional debt. so it's really a shell game. ultimately says no, we're going to tax the wealthy, tax the wealthy. and by the way, 0.3% of all americans have million dollars incomes. tax them all you want, ultimately this is going to fall on work class people. it's going to harm jobs and it does nothing to deal with our deficit. so i'm not terribly impressed by what the senate came up with. but i know my senate republican colleagues, they're operating with a gun on their head and i understand that. >> steve: absolutely. congressman, you're probably going to take it up later on today. thank you very much for the preview. jeb hensarling from texas. >> thank you ♪

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everybody. it's 9:00 o'clock >> it was down to the wire in washington last night. lawmakers missed the midnight deadline. they cut a deal in the wee hours of the night mitch mcconnell is not very happy. the next stop the republican controlled house. steve? >> they were supposed to rescue a stranded swimmer. instead swimmers needed to be saved after their chopper. not supposed to land like that. what happened to the people on board? details ahead brian: out with the old. in with the new. look you who the world rang in the new year.

fox apfriends, hour four, starts right now ♪ . juliet: oh, yeah. steve: sing it, frank. juliet: i love frank sinatra. brian: one person's party is the other person's cleanup. juliet: they get it done real fast. the second the ball drops they head out of there and go to the clubs. brian: the fun being there. the thing that is deceptive. they put you behind the bike racks. you can not drink anything. can not use the bathroom and get your spot back. you're locked in like cattle

until afternoon. juliet: the key the hotels around there sold out for next year. but that is the key. get a nice little room. have a little party with your friends. steve: very nice. you see it all. if you missed the ball dropping stuff like that. we have details. this is our fox news alert. this is the reason brian and i are in with juliet today. the people in that building were burning midnight oil. they could have a fiscal hangover. what they have done, technically we have sailed over the fiscal cliff. the senate last night, a vote 89-89, passed a bill which will jack up taxes on america's most successful. now what it is doing making its way across the hall into the house. will they take it up later today? maybe. they're under no obligation. but there is a real good possibility, john boehner and company, republicans who voted down plan b will say, no, don't like it the way it is. brian: what is in it? what do we know?

taxes won't go up for those making 250,000. won't go up over single person making 400. for a couple making 450,000. dividend and capital-gains taxes go from 15% to 20%. obamacare,.8%. if you know someone who died they have to give up 40% what they inherited over $5 million as opposed to 35%. they were saying that was going to be higher than that unemployment insurance, instead of six months, remain as year. juliet: here is basically how it went down. it was 89 8 vote. here is group voted against it. tom harkin, democrat iowa. tom carper. rand paul from kentucky. republican as well. richard shelby, republican, alabama. michael bennet from colorado, he is a democrat. charles grassley from ohio. marco rubio from florida. steve: why did the republicans vote against it?

republicans don't like to increase taxes on anybody. republicans say this does nothing on spending. why did ultraliberal democrats vote against it? they didn't like the fact that they moved the threshold from 250 up to 450 for couples in the stop tax bracket. brian: there's a lot of people who believe that when you have a strong vote from the senate like that, it puts unbelievable amount of pressure on the house. maybe in past generations, in past decades and past, past bicameral negotiations that would be but it seems as though republicans in the house will do what they think is right. they have already shown that when people were asked, when they asked them to have the plan b ready, to say let's raise taxes on those who make over a million dollars. i'm not sure they feel the pressure like everyone says they do. steve: apparently we got a tick-tock from ed henry. he described what happened. apparently behind the scenes, okay, they eventually settled on $450,000.

apparently when mcconnell started dealing directly with biden, mcconnell's first offer was 750. remember boehner's last week was a million. over last couple, i want to say early sunday morning. mitch mcconnell offer was 750,000. that got the president and biden to amp it up where it is now. juliet: jumping over harry reid. steve: harry reid was not returning phone calls. mitch mcconnell said i will eliminate the middleman. here is the senate minority leader why i' friday to do something he does not like which is raise taxes? >> i know i can speak for my entire conference we say we don't think taxes should be going up on anyone. we all knew if we did nothing, they would be going up on everyone today. each of us could spend the rest of the week discussing what a perfect solution would have looked like but the end result would have been the largest tax increase in american

history. so it took an imperfect solution to prevent our constituents from a very real financial pain. juliet: remember, a deal only cuts 15 billion in spending. 15 billion. steve: raises over 600 billion in taxes. this morning we've been talking about it extensively. that is for everyone dollar cut, they jack up taxes $41. if you're against raising taxes, that's, you would think that's a deal breaker. brian: steve, earlier we talked to john tamney from realclearmarkets.com. he was e-mailing us at 3:00 in the morning look at the bill, he was really upset republicans would sign off on it. he thinks it is bad for the country. here's more. >> they should run from this as fast as they possibly can. this is such a bad deal for republicans. one of the best things about their brand they are principled against tax increases. they realize we have a

spending problem, not a revenue problem. to turn around and agree to major tax increases, that's what we're talking about, in return for nothing in the way of spending cuts would be the ultimate in bad deals. steve: he says the house should run away from it. charles krauthamer was on the channel last night. given the president of the united states's, he had that cheerleader rally in the middle of the day, when it looked for a while like the president might have actually derailed the deal, krauthamer had this to say about the tenor of the president. >> i found it astonishing. here he is coming out to speak to the nation at a crucial moment in very delicate negotiations and he comes out there with incredible arrogance. he really kills the congress. he spikes the football on the republicans. he rubs in the fact that they were resisting a raise in rates. he made them do it. and of course as always he places himself hovering

benignly at an olympian level above the fray where the children are playing in the sandbox and he asking that everybody be reasonable as if he just arriving in washington on a tourist visa. juliet: ouch. oh, man. brian: it is true. i just don't get the interview sunday on "meet the press." i don't understand the meaning of press conference i guess to address his union supporters and those on the left he is the guy fighting still for why he claims he was elected but the tenor was just, it was a mocking that would have made muhammad ali, when he was cassius clay blush. steve: i think what has been revealed over past couple days, the president of the united states while he was running for re-election, we have to do stuff to make sure entitlements and big spending programs, we rein them in a little bit. he shows no sign of actually wanting to cut anything. in fact what he made clear yesterday in that same press availability, was he said

that in addition to whatever tax hikes happen with this latest senate deal, he wants to jack up taxes even more in the coming year. brian: the good news, defense is not going to be cut for at least two months. they found a way to get $24 billion that would postpone any sequester for at least a couple of months. there were people, for lack of a better term, in the line of fire, that was the place that was going to be the most gutted and for whatever reason they were the ones that would take the bulk of the cuts to go through today, if there was no mcconnell deal. juliet: two months goes by real fast. let's talk about happy things, shall we, boys? brian: like for example? juliet: seems real heavy in here. steve: where did this confetti come from? juliet: problem of bottom of somebody's foot when they came in here today. brian: hemmer's sweater. juliet: a million people packed in times square in new york city to ring in the new year. check this out.

so they say it was like 2000 pound of confetti as we watched the rockettes kiss mayor bloomberg and this couple make out. the waterford crystal ball dropped at midnight of course. in houston, texas rain did not stop thousands of people to head downtown and watch performances and to celebrate. the beautiful harbor area, fireworks lit it up to welcome in 2013. scary moments though. a terrifying scene. a helicopter trying to rescue a stranded swimmer. this happened in rio. they had beautiful fireworks there. this is fireworks you didn't want to see. a helicopter crashing into the ocean. amazing all four people inside managed to make it out okay. the swimmer was outside. he was in distress. that is why the helicopter was going down to rescue the swimmer. fortunately he was saved by a nearby surfer. year long pain at the pump for americans that

reached an all-time high. aaa says the national average for a gallon of gas in 2012, way back when, was nine cents higher than the record of 3.60 in 2011. bad weather and tension in the middle east drove up prices. say good-bye to 75 waters, incandescent bulbs. federal law says the bulbs can be no longer sold as of today. stores can clear out stock. you will not have to replace them with led and. 60 and 40 watt bulbs can be phased out next year. brian: that is ridiculous. i have the screwy bulbs. >> pig tails, cfl? brian: give me a bull be please. steve: this is why i turn on a light, see stuff. a 40 watt bulb? come on. what is this about a thousand watts?

brian: your home has no backlighting. that is one thing i always said. steve: i have a key light. but that is something else. juliet: don't want to hear about that. steve: this tuesday, first day of 2013, an american family dreams torn apart by international politics as vladmir putin, president of russia, bans all adoptions in act of retaliation against the united states. one couple's heartbreaking story coming up. juliet: yeah. president obama says congress should get raises. most americans think they're doing a lousy jobs. will lawmakers money that their paycheck this is year? we've talk about that @

♪ sing polly wolly doodle all the day ♪ ♪ hah @

juliet: welcome back. 14 minutes past the hour. russia's president vladmir putin banned the adoption of russian children by americans, halting the adoptions already in progress, dealing an emotional blow understandably to many families. craig and kim church went with their two daughters all the way to russia, spending

hours getting to know the what little boys who were supposed to become part of their family. now those dreams have been put on hold. craig and kim join us now from charlotte. good to see you guys again. >> good morning. >> good morning. juliet: thank you very much. so, guys, tell me exactly what happened here? where were you in the process of getting your children adopted? >> well on october the 24th we received our referral. on november 16th we were on a plane to go visit our boys. we were with them are over thanksgiving. stayed with them a week. returned home and in the process of waiting on a court date in russia to go back and adopt them. juliet: craig, what happened? >> well, we got home. then we heard of the potential ban. we got a little heads up from that on our adoption agency. then we just started praying. and just asking, no, no explanation why. we just found out and then,

just started praying and asking the lord to intervene in this. i know many people are devastated. our hearts are breaking humanly speaking but spiritually speaking we're staying strong in our faith and our lord jesus christ. juliet: what are your plans at this point? because we had somebody on the show yesterday who decided she would go there early as possible and just made it in the 11th hour. what are you doing at this point? are you trying to get back over there? are you talking to the agency? what are they saying? >> right now the agency is speaking with us. they're kind of waiting on confirmmation as well. they don't want to give us information they're not sure is exact. so we're just waiting on them. as craig said, we're waiting on the lord, that is where our trust is right now. he can do the impossible. we don't know exactly what we'll do. we're just waiting, to find out exactly what the law means, especially the 46 children in the pipeline, ready to come home and seen

their parents already. two of those of course are our. juliet: americans need to understand. these children have been passed over by russians themselves. >> yes. juliet: tell us a little bit about who these children are. >> well, our boys are precious. all children are. a reward from the lord, psalm 127. there are 26 children that have been saved. there are 2,000 thousand orphans in russia so this is a small number. 27,000. they are waiting for us to return. we have seen them. we have held them. we loved them. we told them in our broken russian we are coming back. so they are expecting us to return. >> and our oldest one is thad, he is 3 1/2. our youngest one is 1 1/2. we believe they're our children. god's called us to do this. we believe that they're ours and we're just asking everybody right now to just to pray, pray with us. a simple prayer. lord, bring these boys home.

and also pray for those, 46 others and families that are devastated and their hearts are breaking like ours. juliet: i literally have a lump in my throat. i've been talking to folks like you over last few days and it is heartbreaking. the especially, kim, what you said about the children the they're waiting for you to come back and get them. this is unbelievably sickening that vladmir putin said. there are probably many places in the world living standards are better than ours. so what? shall we send all children there or move there ourselves? what kind of human being is he. thanks very much for joining us. we'll watch your situation. stay in touch with us and let us know. best to you. >> god bless. >> same to you. thank you. juliet: coming up, are republicans likely to agree to the fiscal cliff deal? the senate has just put on the table? we'll talk to our senior capitol hill editor chad pergram up next. lawmakers have bans on

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juliet: well-come back. 22 minutes past the hour. some quick headlines. everybody get ready to pay more in taxes. five new taxes go into effect under obamacare. they affect everything from health care cost to the cost of medical devices. the congressional budget office says this is a one trillion dollars tax hike over the next decade. people in massachusetts saying good-bye to 2012 and bottled water. new ban on selling single-serving last plastic water bottles. that is effort to cut back on waste.

stores caught selling the bottles face a $50 fine. steve and brian? steve: thanks, huddy. the senate may have approved a scaled down bill but we're not out of woods yet. it needs to be passed by the house of representatives. we're talking about the fiscal cliff and they came up with tax hikes. brian: if we do pass it are we still out of the woods anyway? we're joined by fox news senior capitol hill editor chad pergram. he told us he doesn't need to sleep. steve: he is giving us play-by-play wherever across the globe. brian: chad, in your mind when did this appear to be to be passed in the senate? >> it was not until the very end hour, i'll tell you last night. it was key to hear that joe biden, vice president was coming to the capitol. we were told there was still selling to do. we sort of described joe biden up here jokingly, he was the closer. that was always the signal we new ones you heard joe biden is coming to the

capitol and would be like rivera coming from the bullpen and they're playing the sandman. that is the key thing last night. we're told house republicans were not a part of this. brendan buck, a spokesman for house speaker john boehner, said this was all the vice president and mitch mcconnell the minority leader in the senate. this was going on between both of them. that's why there is a lot of question as they try to move this through the house of representatives in the next day or two. steve: let's talk about that. so the house is open for business today. there is no assurance they will take this up. john boehner, he had a much different blueprint than this thing he got from mitch mcconnell. you have to figure. we just had jeb hensarling, the congressman from texas. he said, if it was up to him and time to do some amending to the senate bill you have to do something about spending because that does not seem to be addressed in any form in this bill. >> jeb hensarling is one of the rock-ribbed

conservatives and looks at spending and the broader picture down the road. this bill does not address the grand bargain issues like entitlements that are the main drivers of the debt and those frankly are conservatives and some democrats to try to tackle. it is hard to get your brain wrapped around the numbers and get to something. nobody wants to give and getting to the votes is very, very hard. i should point out jeb hensarling at least for the moment is the chair of house republican conference that will change come thursday when the new conference starts. he did not sign onto the statement put out by the house rub rub leadership. keith think mcmorris rogers, number number four leader in the house she signed on by not jeb hensarling. that is where ends zarlink is right now. brian: back to the senate for a second. i saw you put out senator benett, came out with a statement, democrat from colorado. i didn't vote for this. just to summarize he said because i was for a bill

that would cut the deficit. this doesn't cut the deficit. is there a sense among republicans they have to hold their nose to sign this or more democrats had to hold their nose to sign this? >> i think they both have to hold their noses. this bill is so big whether it deals with all the difficult provisions of taxes and estate tax, keeping dairy prices from going up. there is partial renewal of the farm bill for nine months. there is enough in this bill a member, if he or she wanted to vote for the bill they could go through, like a cafeteria option pluck off here are two or three things. my voters back in my district this is a tough bill. i don't like everything in it but these two or three things are important for our constituents and they can justify how they vote. i tell you just a minute ago to dave camp who is the chairman of ways and means committee. he said this is a very big vote. this is something that members will have to take some time to think about. that's why it is very questionable whether or not they can move that through the house of representatives now.

steve: chad, before you go, i know you're talking to a number of members. what is their reaction to the president with that tv appearance he had yesterday afternoon where essentially, it seemed like a pep rally and a campaign stop? he said, he put the republicans on alert, he wasn't going to let them shove spending cuts at us. i saw john mccain was upset by the combments and so were senator corker as well. >> many, many republicans especially house republicans thought that was a little bit of gloating by the president. from the president's perspective they might argue, hey, we won the election, give us some elbow room here. we're actually asserting positions people voted for us to fulfill in the new term. that was a little bit what was going on. that absolutely rubbed a lot of republicans wrong. had we not been in such a critical circumstance here, that might dwindle the amount of votes people that might vote for this at the end of the day. brian: rather than get an e-mail next few minutes, let me ask you directly. do you think there will be a vote today, tomorrow or what

is more likely, or the next day in the house? >> it is very hard. i talked a couple other people. they said they prepared potential amendment plans for what they thought was coming from the senate. at the end of the day it is not exactly what they looked like. they might have to go back and recalculate this. another viewpoint might be, let's take what the bill was and see where the chips fall. let's just vote on the bill to see where it goes. that is something that the house republicans will have to hash out. house democrats will have to hash this out too to see where they stand on this everybody so far is being very tentative about this, because, hey, we're already off the cliff at least from acutarial standpoint. in some respects it is hurry up and wait. other people would like to move quick lift other people would like to say, hey, calm this down a little bit. there is no reason we have to vote on the senate bill right away. steve: chad pergram our head guy on capitol hill. take the microphone off and talk to everybody in the building. >> i will be took that. brian: never use their names. coming up straight ahead, did you party too hardy last

night? be honest with me, be honest with yourself. do you have a changeover? if so, stick around we're sharing some remedies that are guaranteed to work. steve: starts with kettle one. brian: that is how it starts. i will tell you how it should end. steve: fine. [ male announcer ] what are happy kids made of? bikes and balloons, wholesome noodles on spoons. a kite, a breeze, a dunk of grilled cheese. catches and throws, and spaghettio's. that's what happy kids are made of. campbell's. it's amazing what soup can do.

steve: fox news alert. the u.s. senate reached a fiscal cliff deal of sorts at the 11th hour in the middle of the night. how are democrats and the president feeling this morning? relieved or anxious getting it through to the house where they may vote on later today or maybe not? brian: steve, you have great questions. only one man capable and standing by to answer those questions. steve: how lucky are we. look it is wendell goler at the white house. [cheering] >> reporter: if my buddy chad pergram couldn't answer the question a few minutes ago i couldn't answer the question. we'll wait to see if the house will vote today on the senate passed basically binds the country two month extension of so-called fiscal cliff. the measure raises revenue. as chad points out it contains no spending cuts. that will make it hard sell to house republicans.

the all but five senate republicans voted for it may make it easier to swallow. the deal makes the bush administration tax cut permanent for families making less than $450,000 a year. provides another year of extended unemployment benefits, raises value of estates protected from the death tax but payroll taxes are going back up. vice president biden who worked out the deal with senate republican leader mitch mcconnell wouldn't bet on how the house will vote. >> surely shouldn't predict how the house is going to vote though i feel very, very good. happy new year and i will see you all maybe tomorrow. >> reporter: now before the senate vote, president obama had appeared with middle class americans who face a tax hike to pressure house republicans. after the vote he released a statement that said, in part, quote, this agreement is the right thing to do for our country and the house should pass it without delay but with no commitment to cut spending, house republican leaders said they wanted to

study the bill before promising a vote. even senator mcconnell admitted the compromise wasn't a pretty one. >> shouldn't have taken us this long to come to an agreement and it shouldn't be the model how we do things around here but the appreciate the vice president's willingness to get this done for the country. i know i can speak for my entire conference i say we don't think taxes should be going up on anyone. >> reporter: the house is back in session about noon. if it does pass the bill we could look for another big fight over spending within weeks when congress is faced with raising the nation's debt limit. brian, steve, juliet? steve: wendell, thank you very much. i'm looking, jason chaffetz, of course congressman from utah, republican side, says on twitter, without substantial real, first-year cuts in spending i can't vote a bill passed by the senate last night. how many guys like him are thinking about that this morning? brian: he is one of the people that didn't vote for the million dollar plan b

threshold. juliet: all right. let's get out to some other headlines now. iran continuing its military drills for a fourth day. this is new video you're looking at released by iranian television. it shows iran military test firing two missiles yesterday in the strait of hormuz. they fired one of the missiles from land that reportedly struck a mukhtar get in the water. iranian officials say it is a show of the country's power and resolve. six days of drills started friday will continue through tomorrow. people are still recovering from the tragic shooting from newtown, connecticut. now a lawyer is looking to sue the state for $100 million on behalf of a 6-year-old survivor. he said the state didn't do enough to keep kids safe. the attorney general joined us earlier on fox and friends and said this is not the case. >> the simple bottom line the state is not responsible for local school safety. it's a, it's a local issue. that doesn't mean that newtown is liable. newtown did everything in

our judgement that it could have but the bottom line is, if you open the gates to liability in a case such as this, where would it stop? juliet: the connecticut trial lawyer association released a statement saying the timing, circumstance of this action are ill-advised. minnesota congresswoman michele bachmann introducing legislation to block a planned pay raise for congress. president obama approved the raise last week. bachmann said give the current state of the economy that doesn't seem like a smart idea. in her statement she says quote, we have a spending problem in our country. we should look for areas to cut spending of. several other republican lawmakers are blocking the effort to block raise. fiscal cliff deal puts kibosh on pay raises. it hasn't passed house so technically it is still on the table. if the house passes the senate fiscal cliff bill we avoid going over the dairy cliff. this will prevent from milk prices doubling to nearly eight bucks a gallon the senate version of the bill extends the farm bill for another year, keeping

current dairy programs in place. farmers allow people to focus on giving customers what they need. >> we have become more innovative. we're into the marketplace we have new products. we have lactose-free milk, low-fat, low sugar flavored milks. that is exactly what you're going to do now. what do you want a as consumer. we'll take care of you. juliet: house speaker john boehner has pushed back voting a new five-year farm bill for months saying it doesn't have the support it needs to pass. brian, what's going on over there, buddy? brian: well, i'll trying to help a lot of american people. are you physicianed and faded out today because of wild new year's eve. do you feel you're hung over for the first time in your adult life? you don't know what to do? we want to be your resource. we don't have a hotline but we have a segment prepared for you. we have a mixologist.

she brought remedies to cure the hangover. yesterday he told us what? >> i told you how to prevent the hangover ahead of time the since you didn't listen to my advice i will help you cure the hangover. brian: great. let's start here. >> there are a lot of ways to cure a hangover which is called hair of the dog. drinking more alcohol. it doesn't cure anything. it prolongs the hangover. brian: but it softens it am i correct? >> totally softens it. classic one is bloody mary. we're making it with a keetel one. always roll the bloody marys. brian: don't want to get the drink angry. >> no, angry drinks are the worst. if you don't like vodka, i have something called bloody maria. this is a nice millky liquor coming from mexico. i like to had suracha, tabasco, awake the senses. incredible what it does to

the palate. brian: if you have a bloody mary to get the hangover, recommending to get out of the hangover have a bloody mary? >> yes. a bit less alcohol. do something like a hot toddy. we have tea with to coat the stomach. you will not feel very good in the tummy. bear ron yeager liquor. it gives natural sweetness. brian: a little liquor? >> a little liquor to take off the edge. brian: can i taste this? this is the actual mix? >> it is the actual mix. your stomach will feel a lot better after it. brian: okay. >> best thing to do is hydrate, hydrate, hydrate. keep drinking water. for people who drink coffee, it is really important not to deprive yourself of that caffeine you might need in the morning. it will make your headache way worse if you don't grab that cup. brian: you realize that takes the water out of your body? it dehydrates you, right. >> make sure to put water

in. best thing to do is get the electrolytes back into the system. gatorade is great but my remedy is coconut water. less suggest far. there are great brands here. you can get at any bodega or store across the country. brian: they're both the same one, right? this is the same thing? >> they're both all natural coconut water. potassium, you lose a lot of essential site pins and -- vitamins and minerals. grab a banana. grab a banana eat one after a long night out i feel great. also have some caches. do not go to dairy or citrus. it will be terrible for your system. have a lot of caches to remen shish all you lost. brian: don't want the bloody mary. tired of hot water. don't want the tea. don't want the banana. nothing wrong with a piece of bread and jamming it down your throat. >> that people like greasy food but grains are

essential. brian: always the pro, advil, aspirin. >> ibuprofen is best. liquid advil is best. hits the system a little faster. you despif yourself of vitamin b. you lose that in the liver in the system. take a tablet of that. al can sellers. will make you feel a little bit better. guys you just need some zs. get a little sleep to cure the hangover. brian: take off the beer goggles. put on the night mask. >> somewhere in here you will find a great thing. i like coconut water, banana and vitamin b. i feel 100% better. brian: if you want to catch pam go downtown. >> the dead rabbit. open in new york city in few weeks. catch me there. brian: irish bar owners. what do they think of next. they get us drunk and get us sober. >> hope you all feel better today. brian: you hear that steve? we talked about ketel one,

talk about absolute. waiting until absolute last minute to pass a deal. are americans getting a wrong deal because they couldn't finish their job on time? senator lindsey graham is next. as you wave good-bye to 2012. say good-bye to this. "gangnam style". he says he will never dance to it again. i guess he will go to the hustle on the bump. ♪ . people really love snapshot from progressive, but don't just listen to me. listen to these happy progressive customers. i plugged in snapshot, and 30 days later, i was saving big on car insurance. with snapshot, i knew what i could save before i switched to progressive. the better i drive, the more i save. i wish our company had something this cool. you're not filming this, are you? aw! camera shy.

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steve: fox news alert. vice president joe biden made a late-night arrival on capitol hill to help clinch the negotiations to avoid a fiscal cliff but senator mcconnell said this. >> shouldn't have taken us this long to come to an agreement and this shouldn't be the model for how we do things around here. steve: i think that's an

understatement but should he have had to come at all, the vice president and did the negotiations have to take place behind closed doors? our next guest says no. joining is south carolina senator lindsey graham. senator, good morning to you. what time did you get back to bid last night? >> 2:45. i watched clem son game. go tigers. steve: what happened last night in the senate? >> it is result of dysfunctional senate. as 100 senators had privilege to the house bill, jeb hensarling said earlier, we should have taken up the house bill weeks ago and voting on rates and spending. everything comes to the senate to die. it is dysfunctional place. doing the stuff behind closed doors will stop. if you think you will get the debt ceiling raised coming out with a plan about an hour before it expires, and ask all of us to vote for it you can forget it. these days are over.

steve: what do you think is going to happen in the house? they will be open for business today. no guaranty they will take it up. under the hastert rule they may not even do that. but, you know, we heard from jeb hensarling. he said there will have to be some amendments and it has got to address spending. >> do the best you can. make it better if you can. but here's reality. right now all tax rates have gone up on all americans. the death tax went from 35 to 55. passing a bill in the senate means nothing unless it is signed by the president. the defense department is on its way to being destroyed. there is just a lot of bad things will happen if we don't get this right. to my friends in the house. make it better if you can. you need to understand this. if we don't get this tax rate problem fixed for all americans, the economy is going to collapse. the stock market will go down. the defense department will become unraveled. we're going to get blamed. in about two weeks into this we'll fold like a cheap suit. so what i would advise my house guys to do.

make it better if you can. save your powder for the debt ceiling fight. work with me and others never to raise the debt ceiling again unless we address why we're in so much debt. never do a debt ceiling increase until we save social security and medicare from bankruptcy. and get this country off the road to becoming greece. that is where we have leverage. that is where we should go to next. steve: i heard you say it never raise the debt ceiling again unless you get those things. i remember the current president of the united states when he was a senator said, i can't vote to increase the debt ceiling. he changed his tune on that. >> he is such a small-minded guy in big times. the only reason we don't have a big deal or anything on spending because barack obama does a pep rally during the negotiations. he will spend every dime you give him. this guy is big government liberal. only big idea every embraced is big government. stimulus, obamacare. we'll make him historic president whether he wants it be or not. social security and medicare are going bankrupt. the debt ceiling is a chance to get those programs out of

bankruptcy and put the country on a path to sustainability. we borrowed 2.1 trillion in august of 2011. we spent 2.1 trillion in 17 months. we're burning threw money. every child in america born owes $51,000 on the date of their birth. and that is unacceptable. that is going to stop. we're not going to raise the debt ceiling again and borrow a unabout much more money until we address why we're going protect as a nation. steve: senator graham, i was talking to one of my neighbors that works on wall street. he says given the inaction up on capitol hill regarding the debt and long-term entitlements we're cruising to get downgraded again by the rating agencies and that will have a ripple effect on our economy for a very long time. >> we're destroying the american dream. i've been here for almost 20 years. i have never seen a better chance for republicans and democrats to come together, reform entitlements in a way to save these programs, in

2037 the debt will twice size of our economy. the good news we're one big deal away from dominating the 21st century. the bad news is that deal is elusive. we have leverage in the debt ceiling to make this president face up to the fact that we're spending our way into oblivion. most americans don't want to borrow anymore money unless we get their kids out debt and start saving programs that we're all going to need down the road like medicare and social security. this is the best chance, steve, i've seen since i've been in congress, to do something big. mr. president, embrace bigby partisan ideas for the first time in your life. you will go down in history as historic president. don't be so small-minded. man-up here. be the president that the country wants you to be. do something with me and others to save this country from becoming greece. we're running out of time, mr. president. steve: all right. they have televisions at white house. i have a feeling he will hear about that. >> i hope so. steve: lindsey graham, senator from south carolina. thank you so much.

and happy new year. 10 minutes now before the top of the hour. coming up he is correctly predicted last two reseconds. what is in store for the economy in the next year? most trusted name in trends is gerald calenti is here next with his 2013 predictions.

juliet: 9:53 east coast. some quick headlines. attention netflix users. congress just passed a bill last week allowing netflix and other video sharing sites to share viewers history. brian, you're in trouble. you will have the opportunity to opt in and opt out of the sharing feature. brian: a lot of sports. juliet: say good-bye to "gangnam style". ♪ .

my arch nemesis, core reason singer psy, says he is retiring song of new year to focus on his next big disaster song. i mean, hit. steve: good luck to him. brian: correctly predicted everything from the collapse of the soviet union to the dot-com melt down and even last two recessions. steve: found of trends research institute is here for his predictions for 2013 is gerald salenti. good morning to you. >> good morning. steve: this is party time. there is lot of gloom and doom out there. >> people want to boogie before the lights go out. they're tired of this stuff. it is, there was no election bounce. after the election things went to a dud. physical cliff hit. tragedy in newtown. you're looking at news this morning about war games. isn't that wonderful?

steve: in iran? >> looking at millenial generation. they're getting out of school with mountain of debt and no future in front of them. they're saying enough. i want to have a good time. we're drawing parallels. the crash of 1929 the great depression, currency wars, trade wars, world war. you go back to the that time it was happiest hottest time in american music. people are swinging. we're in the mood. we'll see the same thing start happening. people know in their bones that things aren't right. they want to have a good me. steve: live it up now while you can. >> there will on changes in music, fashion, entertainment. juliet: will wet get back to swing? >> it is something new. never comes back the same. brian: let's talk about the economy. your prediction? >> more of the same but worse. the only thing that is keeping this economy going, everybody knows it, cheap money. interest rates near zero. i just bought a building. brian: keep printing money. >> just bought a building in

upper town kingston, colonial kingston. got a mortgage, 3.25%. they covered closing costs. locked in for 10-year. steve: giving money away. >> exactly. by printing all the money they're devaluing the currency. not only the united states, the new prime minister of japan, came in, bank of japan, print more money. european union, print more money. they're just dumping money into the system. it is not regeneratings on its own power. that is why it is going to go down. juliet: number three, steve, go ahead. steve: something we saw a lot of after the election, people were interesting in their state seceding from the union. >> one of our top trends last year, secession obsession. this year is is progress. there are 250 secession movements going on around the world, not only in the u.s. this isn't a bunch of right-wing nuts. these are people had it with the federal government. look what is going on. look at this physical cliff drama. the d.c. drama queens.

who could make this up. steve: new millenial education is? >> will be moved. their minds are wired different. the system is industrialize age mentality. kidses are learning different way. they're not only wired differently in terms of technology, their mind are wired differently. the education system has not got into it yet to develop a new one. it will be a huge business. juliet: that's true. steve: the founder of trends research institute. gerald, thank you very much. brian: political atheist with great insight. thank you so much. juliet: we'll take a break. we'll be right back. stay with us.